Govt shuts down DFC lending agency over mounting losses
The Delhi Government has shut down its lending agency, Delhi Financial Corporation DFC due to mounting losses, and formed a nine-member committee to complete its winding up.
The winding up of the DFC was notified by the finance department on February 6. The decision to shut the entity was taken in a Cabinet meeting last month, chaired by Delhi Chief Minister Rekha Gupta, official said.
The “acute financial constraints” faced by the DFC, which provided loans to medium, small and micro projects, were flagged in a meeting of its board members in November last year.
The board was apprised that the share capital of DFC had been eroded and the losses accumulated to the tune of Rs 42 crore. It was also not in a position to repay the total outstanding loan of `80 crore it owed to the Delhi Government as of September 2025.
Further, the corporation’s entire capital base and reserves were completely eroded, and its net worth showed a negative growth of Rs 15 crore, official documents showed. In exercise of the powers conferred by Section 45 of the State Financial Corporations Act, 1951, and all other powers enabling in this behalf, the Lieutenant Governor of the National Capital Territory of Delhi has ordered winding up the DFC, the finance department said.
“The DFC will stand wound up with effect from the date of publication of this Notification (February 6, 2026) in the Official Gazette,” the notification read. All operations of the corporation, including sanction of fresh loans, stand ceased, it said.
The entity functioned only for the purpose of winding up by way of realisation of dues, recovery, settlement of liabilities, disposal or transfer of assets, and completion of statutory and administrative closure, it said.
The nine-member winding up committee, headed by the state finance secretary, is now vested with all powers of the Board of Directors of the Corporation, said the notification.
The committee will perform winding up functions by taking custody and management of all assets, records, securities, cash, bank balances, investments and properties of the DFC, and realise dues, pursue recoveries, and fulfil statutory compliance.
The panel will also settle statutory dues and liabilities, including those owed to the Delhi government, transfer or dispose of movable and immovable assets, and take decisions for employee management, including redeployment and terminal benefits.
The pay, service conditions, redeployment, retirement benefits, pension and all terminal dues of employees of DFC will be dealt with in accordance with applicable rules, notifications, Government instructions and legal advice, and subject to availability of funds, said the notification.
All legal proceedings by or against the DFC pending before any court, tribunal or any other authority will be handled by the committee.
Upon completion of winding-up and settlement of residual assets and liabilities, the lieutenant governor will issue another notification declaring the final dissolution of the DFC, officials said.
