About 50 per cent of the accounts that availed of the EMI moratorium amid the pandemic, which made things worse in an already slowing economy, are expected to be restructured, and of these accounts that would undergo restructuring, one-third, or Rs 6-9 trillion, could turn into NPAs.
The National Company Law Tribunal (NCLT) has approved the resolution plan of Twin Star Technologies -- a promoter entity of the Vedanta Resources group -- for the Videocon group. But it has pointed out that the successful resolution applicant is "paying almost nothing" as the amount offered is only 4.15 per cent of total outstanding claim. It noted the hair cut for all the creditors is 95.85 per cent and suggested to both committee of creditors (CoC) and the successful applicant an increase in the payout.
She said Finance Minister Arun Jaitley is working "hard" on the Bankruptcy Code
The government would be ironing out issues related to the controversial 'bail-in' clause in the earlier Bill, explore hiking the deposit insurance cover of customers, and decide whether the resolution framework should apply to public sector banks.
According to Fitch, the scheme could open a window for banks to build capital buffers while putting off full recognition of COVID-19 pandemic's impact on loan portfolios, but is reminiscent of a strategy adopted over 2010-2016 that delayed and exacerbated problems for banks.
The new Insolvency and Bankruptcy Code has serious drawbacks, finds out Somasekhar Sundaresan.
To strengthen corporate governance practices and disclosure requirements, Sebi has notified new rules, including that top 1,000 listed firms will have to formulate a dividend distribution policy. The regulator has also put in place a framework in relation to applicability, constitution and role of the Risk Management Committee (RMC) and eased norms for re-classification of a promoter as a public shareholder, according to a notification dated May 5. In addition, the regulator has asked listed firms to make available audio and video recordings of analyst and investor meets on their websites as well as stock exchanges within 24 hours or before the next trading day and also notified rules regarding Business Responsibility and Sustainability Report (BSSR).
Corporate Affairs Secretary Injeti Srinivas said the issue is how the interests of stakeholders are to be balanced
On resolution of stressed cases, she said ICICI Bank has been taking the lead in several cases and was the first bank to refer a case to NCLT
Bharti Airtel Chairman Sunil Bharti Mittal said India has lost one of the finest political leaders and a legal luminary.
Will the Financial Resolution and Deposit Insurance Bill endanger our bank deposits?
The National Company Law Tribunal on Tuesday approved the Jalan-Kalrock Consortium's resolution plan for the bankrupt Jet Airways.
Sources said much has been done to ease the tax burden of the middle classes in the last five years, and that such a measure affects only a limited segment of people when the focus should be to put money in rural areas. Archis Mohan reports.
Governments that did not respect the central bank's independence would sooner or later incur the wrath of financial markets, ignite economic fire, and come to rue the day they undermined the regulatory institution, Deputy Governor Viral Acharya warned.
Some measures announced in Indradhanush -- a 7-point Modi plan to revamp State-owned banks but not completed -- may be taken up again.
A lack of adequate disclosures raises the financing costs of corporate firms, especially sub-investment grade ones, and keeps the capital markets small, believes RBI deputy governor Viral Acharya.
NBFCs are facing the heat of a crisis at IL&FS, which defaulted on repayment of its commercial paper dues, leading to a contagion effect in the sector.
With the amendment, firms like EY and Deloitte can work as resolution professionals instead of only their partners enrolling as insolvency professionals.
The dispute between RCom and Chinese banks led by ICBC started after Anil Ambani led company defaulted on its loans to Indian as well as Chinese banks. A British court on May 22 asked Ambani to pay nearly $717 million to three Chinese banks within 21 days.
Instead of the minority stake they held earlier, now they have controlling stake in many firms
To minise wasteful administrative costs, number of enterprises in strategic sectors will ordinarily be only one to four; others will be privatised/merged/brought under holding companies, she said.
The brand new bankruptcy process is being brazenly gamed by those with connections and money. The touts and fixers of the previous regime have been replaced by a new set close to this one, observes Debashis Basu.
Heads of various public and private sector banks on Thursday sought to present a counter-narrative on RBI Governor Shaktikanta Das warning lenders about the perils of extreme risk aversion in the pandemic-stricken environment where credit demand is on the wane.
Experts say that under the liquidation process, financial and operational creditors are less likely to recover the full-value of their dues, while employees may not get their full salaries.
It had been pointed out to the banking regulator that one-day default was difficult to monitor in large companies, especially where cash flows are dependent on government payments.
'I suspect the recovery that the banks are going to get out of this IBC is not going to be more than 30 per cent.' 'If you leave the steel industry aside, the recovery rates are not looking very, very healthy,' Jairam Ramesh tells the Rajya Sabha.
'One of the ways to do that is to ensure that NBFCs have got liquidity.' 'If we don't do that, this mood of gloom will continue.' NBFCs need to be provided with liquidity if they have to start lending.
Lenders say settlements will cross over 100 accounts in the March quarter.
Nifty PSU Bank index gained 1% led by Allahabad Bank, Andhra Bank, Syndicate Bank and IDBI Bank
Business leaders, among others, ask govt to let go of fiscal target, seek stimulus, and direct cash transfer.
A source said that the lenders have proposed to change the management of the beleaguered air carrier as they feel it is not possible to run the company with present management.
Ruchi Soya was admitted to the corporate insolvency resolution process (CIRP) in December 2017 and owes lenders Rs 12,000 crore.
The government on Friday gave wide-ranging legislative powers to the Reserve Bank of India to issue directions to lenders to initiate insolvency proceedings for the recovery of bad loans.
RBI may be inclined to impose severe restrictions on lending in the coming quarters.
'I hope the trend is sustainable and that economic activity accelerates going forward.'
The haircut for major banks stands at 52 per cent, if the dues of Jaypee Infrastructure, Lanco Infrastructure and Era Infrastructure are kept out of the calculation.
They play a key role in managing rescue and liquidation processes envisaged under the Code
In an affidavit filed by Union finance ministry on behalf of the Union of India, it said that the relief to all borrowers in respect of compounding of interest during the period of moratorium would be admissible to the categories specified irrespective of whether the borrowers had availed the moratorium or not.
Amtek Auto was among the first list of 12 companies which were referred by the RBI in 2017 to respective banks for initiation of insolvency process for defaults.
While the basic premise and spirit of the Code will remain the same, the commas and the full-stops in the draft report being prepared by a high-level committee will make interpretation of the law simpler
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