Reserve Bank Of India Investigation Report Reveals That Key IL&FS Committees Never Met For Years Together

Many of the key committees of the crisis-ridden Infrastructure Leasing & Financial Services (IL&FS) convened no meetings at all in the last few years, a recent Reserve Bank of India (RBI) investigation report has mentioned.

The RBI investigation report has revealed that the Risk Management Committee (RMC) and the Investment Review Committee of IL&FS did not meet for around three years.

Neither were any risk management measures taken nor were any credit risk and linkage with liquidity risk identified in order to take credit or investment decisions. Also, business strategies of the group were never deliberated from the risk perspective, according to the RBI report.

No meeting of the Investment Review Committee (IRC) was ever held since October 5, 2015. In the absence of the meeting of IRC, all investment related proposals continued to be approved by the Committee of Directors (CoD). There was no system to monitor or review investments, the RBI report stated.

The RBI report also mentioned that the company never disclosed any non-performing assets (NPAs or bad loans) for the last four years and wide divergences were observed between reported and assessed positions of assets' classification and provisions.

The erstwhile IL&FS board failed to exercise oversight and did not monitor affairs of downstream entities in which investments were made, the RBI investigation report stated.