Banks and financial institutions are seeking more flexibility in dealing with commercial and industrial loan accounts, which are seeing pressure due to cash flows and repayment.
Cash-strapped real estate firms are resorting to short-term borrowings of funds to complete ongoing projects as the economic slowdown has virtually halted demand for properties, freezing cash flows.
The Department of Industrial Policy and Promotion in the Commerce Ministry proposes to scale back the Foreign Direct Investment ceiling for the tobacco industry from 100 to 74 per cent and insert a caveat that cigarettes manufactured in the new ventures or in upgraded facilities must be mainly for consumption outside India.Sources said the department, which is responsible for the policy on FDI, is finalising a cabinet note aimed at comprehensive review of the tobacco policy.
Unlikely to launch formal probe into IT firm's Maytas move.
The Reserve Bank of India has started a review of the non-performing asset or bad loan classification norms to ease the flow of credit to corporate groups.The move follows a reference from the government and is aimed at relaxing the norms temporarily to enable companies to access funds during the economic downturn that is putting pressure on cash flows and repayment capabilities.The review has been sought by the finance ministry following appeals from various industries.
Gone are the days when banks would treat payment delays as part of life. Instead, they are taking measures to minimise chances of any kind of payment default by doing rigorous background checks.
The Foreign Investment Promotion Board has cleared a proposal by German plastic moulding major Ralf Schneider to set up a wholly-owned subsidiary in India, setting aside objections raised by its former Indian partner Larsen & Toubro under Press Note 1 of the Foreign Direct Investment policy.
Most private firms see lower pay-outs; govt banks save the day.
Ministry officials said the matter is being reviewed with the objective of bringing down the FDI cap from 100 per cent to 26 per cent in line with the limit for news media. This decision for the review was taken while discussing the proposal of US-based Dow Jones and Company for setting up a wholly-owned subsidiary to carry out publishing the facsimile edition of Wall Street Journal in India.
Asks lenders to make sure that end use of advances to commercial real estate.
Field formations may re-examine cases from 1997.
The slowdown coincides with rising loan defaults by retail customers and small enterprises, which have been hit by a steep rise in lending rates. The resource scarcity has changed the priority of investors. They want to remain liquid and not commit their funds to the long term.
The Reserve Bank of India (RBI) may be brought under the category of other regulators, who might have to park their funds with the government. Banking sources said the move would deal a final blow to the financial autonomy of regulatory bodies.
With banks apprehending large-scale defaults in the aviation sector, RBI is examining data from all lenders regarding their exposure to it. One of the options under consideration of the regulator is to extend the number of days for the banks to classify an asset as default.
Sebi likely to come out with a policy paper soon.
At this time of fear and apprehension over jobs, public sector banks are swimming against the tide to go on a hiring spree.
Kerala-based private sector lender Dhanalakshmi Bank plans to recruit close to 400 employees, almost one-third of its present strength, to build up the existing team to tap more business
Promoters or issuers of foreign currency convertible bonds may be allowed to buy back the bonds if they go in for prepayment.
Most banks are going slow on clearing such loan applications as the employment scenario has turned adverse due to the financial crisis faced by most companies.
While ECBs are pure loans, FCCBs have an in-built option for the lender to convert them into equity of the companies on maturity. Both in ECB and FCCB, till maturity, the borrower is expected to make interest payments on the amount borrowed. Incidentally, the AAR ruling of October 10 had been sought by a non-banking finance company. Till October 31, NBFCs were not allowed to borrow funds from overseas in foreign currency.
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