ILFS Fallout; heavy losses for lenders

India’s move to take control of debt-laden Infrastructure Leasing and Financial Services (IL&FS) will only succeed if lenders agree to take substantial losses, government sources familiar with the discussions told Reuters.

The central government on Monday replaced the board of IL&FS, a major infrastructure financing and construction firm, after its failure to honour debt obligations sent shockwaves through the financial markets.

The IL&FS fallout has already roiled stock markets and the government has scrambled to contain further damage that could undermine confidence in the financial sector.