RBI will engage with IL&FS if needed: Guv Patel

The Reserve Bank of India will engage with the newly constructed Board of the Infrastructure Leasing and Financial Services (IL&FS) if needed, Governor Urjit Patel said on Friday, in a move to lend the regulator's support to the debt-ridden infrastructure behemoth.

Earlier this week, the Centre seized control of IL&FS and superseded its Board in order to save the firm from a financial collapse. Patel described the Centre's move as timely for the beleaguered firm.

“The well structured institutional mechanism taken by the central government has been timely and appropriate and it has helped to stabilise the situation. The RBI will engage with the new Board of IL&FS if necessary on assistance in its efforts going forward,” Patel said in his post-policy press conference.

The Centre, too, has said it is fully committed to ensuring the much-needed liquidity arranged for the IL& FS from the financial system so that no more defaults take place and the infrastructure projects are implemented smoothly.

The construction company, which has accumulated a debt of Rs 91,000 crore, recently defaulted on a few of its re-payments. The rising liquidity issues in IL&FS sent the country's equity market in a panic mode and raised the spectre of a contagion, following the government intervention.

Subsequently, Vineet Nayyar was appointed as the managing director, and Uday Kotak as its new non-executive chairman, earlier this week.