‘Cash flows will go down... but the collateral will not depreciate’

Mahindra Financial Services' Ramesh Iyer shares his insights on how the industry is tackling the coronavirus crisis

In the closing sequence of the action comedy Tropic Thunder, the heroes are escaping a hostile jungle and angry drug lords. The whirring helicopter is waiting to fly them out, to the safety of their homes. Their period of fear and anxiety is about to end. Now, imagine if lightning struck the chopper down. That’s what the pandemic has done to non-banking financial companies in India. The NBFCs have been struggling to break free of the liquidity crunch, after the IL&FS crisis, which unravelled late 2018. But, by end of 2019, a glimmer of recovery began to show — their borrowing costs began to fall. Then the lightning struck early this year with COVID-19, the situation deteriorated further in March, and retail loans are looking dicey once more. We ask Ramesh Iyer, vice chairman and managing director of Mahindra and Mahindra Financial Services, how one of the bigger players in this space plans to tackle this once-in-a-lifetime crisis.