Anil Ambani wants RBI to play Big Brother to ‘gasping’ NBFCs

• Anil Ambani expects the new government and RBI to provide an ‘immediate liquidity window’ to NBFCs
  
• Ambani says NBFCs are facing a full blown crisis.
  
• Ambani’s new slogan across group companies is death of debt
  
  

Anil Ambani the chairman of Anil Dhirubhai Ambani Group (ADAG), believes that the non-banking financial sector or NBFCs are ‘gasping for breath’. He also expects the new government and RBI to provide an ‘immediate liquidity window’ which will double as ‘full life support’ to the sector which is facing many crises including the recent default by IL&FS, according to an interview with Economic Times.

After the IL&FS crisis, few banks are lending to the NBFC sector as they have turned risk averse. This sector raises funds from banks, and uses them to take riskier bets across a range of loans. ADAG’s Reliance Capital has Reliance Housing Finance in its large umbrella of businesses.

“The balance sheet of all major players has shrunk in the past eight months. It’s a full blown crisis,” said Ambani in the interview. Last week, his group company sold its mutual fund business to its partner, Nippon Life Asset Management, effectively exiting the business.

Death of debt: New Mantra

The younger Ambani of the country’s most popular business family, has had his run-ins with the law. He was recently bailed out of a possible jail sentence as one of his now shuttered business, Reliance Communications has failed to pay outstanding dues. Sweedish company Ericsson had dragged him to court over outstanding dues, following which the country’s apex court ordered him to pay ₹ 459 crore to face jail.

The more successful brother, Mukesh Ambani, the chairman of Reliance Industries has bailed him out by paying up this owed amount. But the crisis greatly looms as this payment possibly shut the doors for a deal between his company and Mukesh’s Reliance Jio.

In the interview, Anil also said that it has become tougher to close deals in the country. Unconfirmed reports also say that yet another of his business Big FM owned by Reliance Broadcast Network is all set to close another deal to sell the radio channels.

From now on, Anil who had launched many successful IPOs in the past, has started to focus on organic growth. He cited the example of the umbrella of businesses under Reliance Capital which progressed from being an asset management company in 2006-07 to add others like general insurance, asset reconstruction, home finance, without raising equity.

“I have a slogan I am pushing across the group: death of debt,” Anil said in the ET interview.