Deciphering DHFL's Financial Crisis: A methodology to explore Inconsistent Liquidity

Abstract

Government agencies may aid the organization in some form, but the crisis will have an impact on both infrastructure finance and household spendingInfrastructure financing is an important aspect of Non-Banking Housing Finance Companies' operations. There are both technical and historical reasons that banks are cautious of infrastructure.

Infrastructure financing is the one of the main operations of Non-Banking Housing Finance Company (NBFC). The NBFC is not licensed to access the central Bank liquidity. There are specialized and past explanations that banks are hesitant of Infrastructure Financing Companies. Any organization must have stable liquidity that guarantees its sustainability over the long run. There may be many factors influencing to push the firm into illiquidity position. To get around this, look at how the company differs from other businesses in a positive or negative way.

                The consistent liquidity of the company ensures its long-term financial viability. There may be many factors are influencing to push the firm in to insolvency position. To get around this, it is very essential to look at how the company differs from other businesses in a positive or negative way. This paper aims to show case the methodology or frame work to bring up the financial inconsistency. The examination of listed housing finance companies based on total assets has been undertaken to uncover financial irregularities. Through this proposed approach, DHFL exhibited notably high levels of inconsistent liquidity.