DHFL or Dewan Housing Finance Ltd, which is one of India’s largest housing finance companies is in the news for all the wrong reasons. The company recently announces that it has stopped accepting fresh public deposits and renewals of existing deposits with immediate effect.

This move comes on the back of the recent revision of the credit rating of its fixed deposit programme.

DHFL has been facing multiple downgrades in recent months and the recent downgrade by CARE Ratings affected borrowings including long-term bank facilities, fixed deposit programme, perpetual debt, subordinated debt and Non-Convertible Debentures (NCDs) worth Rs 1.13 trillion.

Out of this, the Fixed Deposit Programme worth Rs 20,000 crore was downgraded from CARE A to CARE BBB- (Credit Watch with negative implications). According to CARE Ratings, CARE A signifies ‘low’ credit risk, while CARE BBB signifies ‘moderate’ credit risk.

On Tuesday, the company via an email sent to distributors announced the stoppage of fresh public deposits and renewals of existing deposits.

It also halted pre-mature withdrawals of existing deposits to saying it would help reorganise its liability management. However, the company said that it will honour its pre-mature deposit withdrawal requests in case of a medical or financial emergency, subject to fulfilment of appropriate documentation.