Delhi Government Officially Wraps Up Loss-Making MSME Lender DFC
In a significant administrative move, the Delhi government has formally shut down the Delhi Financial Corporation (DFC), its state-owned micro, small, and medium enterprise (MSME) lending institution. This decisive action comes after receiving the necessary approval from the lieutenant governor, marking the end of an entity long plagued by financial distress.
Gazette Notification Confirms Immediate Winding-Up
According to an official gazette notification dated February 9, the Delhi Financial Corporation "shall stand wound up with effect from the date of publication of this notification in the official gazette." The document explicitly states that from this date forward, DFC will operate solely for the purpose of winding up its operations. This includes a focused mandate on:
- Realization of outstanding dues and recovery efforts
- Settlement of all remaining liabilities
- Disposal or transfer of corporate assets
- Completion of all statutory and administrative closure actions
This notification formalizes plans that were initially reported by The Times of India in November 2025, which revealed the government's intention to close the corporation after years of mounting financial losses and a critically high level of non-performing assets (NPAs).
High-Powered Committee Takes Charge of Closure Process
To ensure a structured and orderly dissolution, the government has established a high-powered committee as part of a detailed institutional mechanism to oversee the winding-up process. This committee now holds all powers previously vested in DFC's board of directors and senior management. Its comprehensive responsibilities include:
- Overseeing the identification and disposal of both movable and immovable assets owned by the corporation
- Settling outstanding government and municipal dues
- Managing all ongoing legal proceedings involving DFC
- Ensuring compliance with regulatory requirements during the closure phase
Employee Safeguards and Terminal Benefits Assured
The notification provides specific reassurances regarding the welfare of DFC employees affected by the shutdown. It states, "The pay, service conditions, redeployment, retirement benefits, pension/GPF/NPS and all terminal dues of employees of DFC shall be dealt with in accordance with applicable rules, notifications, government instructions and legal advice, and subject to availability of funds." This clause aims to protect employee interests during the transition, ensuring that their financial and professional rights are addressed through established governmental frameworks.
The closure of Delhi Financial Corporation represents a strategic move by the administration to discontinue a persistently loss-making entity, redirect resources, and streamline financial governance in the capital's MSME lending landscape.
