As a lot as 90 per cent of the Rs 38,000 crore debt raised by promoters by pledging their shares don’t meet the collateral prescriptions of the Reserve Bank, finds a report.
The findings come amid a number of situations of sharp corrections within the worth of pledged shares, which led to considerations on learn how to take care of the issue.
“As a lot as 90 per cent of the rated pledged debt has transaction cowl of lower than two instances. This is in distinction to the RBI prescription of a minimal collateral cowl of two instances for lending towards shares by banks and non-banking monetary firms,” Crisil mentioned in a report Monday.
Of the entire, 10 per cent debt has transaction cowl of 1.three instances or decrease, and supplies for extra illiquid collateral like unlisted shares and actual property mortgage to compensate for the decrease cowl, notes the report.