The plan cobbled together by high-street banks to resolve the mess at Dewan Housing Finance Corp (DHFL), the company that is at the epicentre of India’s shadow banking crisis, has put off mutual funds (MFs) which are investors in secured debt papers sold by DHFL .
In recent meetings, fund house officials have told banks that the basic tenet of law is being undermined by the plan that proposes to pay ‘unsecured creditors’ in full while forcing ‘secured creditors’ like MFs to take haircut on their investments.
