TagBanking

SARFAESI Amendment: The “Qualified Buyers” Confusion Remains

[Akhileshwari Anand Raj is a 3rd year B.Com LL.B (Hons.) student at Gujarat National Law University, Gandhinagar] The amendments last year to the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) were long overdue. They sought to ensure that the various banking and recovery laws were in consonance with each other, and they also...

The Risky Truth about Investments by Banks: The RBI’s Amendment To Financial Services Directions

[Utsav Gandhi is a corporate lawyer based in Bangalore] Introduction The Reserve Bank of India (“RBI”) last month amended the Master Direction – Reserve Bank of India (Financial Services provided by Banks) Directions, 2016 (“Directions”). This allows banks to invest in a multitude of entities such as Real Estate Investment Trusts (“REITs”), Infrastructure Investment Trusts (“InvITs”)...

RBI Directions on Peer to Peer Lending

[Guest post by Samrudhi Chothani, an Associate at Bharucha and Partners, Mumbai and Saurav Roy, a IV B.A.LL.B student at the ILS Law College, Pune. Views are personal] Introduction The Peer to Peer (“P2P”) Lending sector is one with tremendous potential and requires robust regulation. P2P lending is similar to crowd-funding, where persons who want loans are connected with interested lenders. The...

Application Under SARFAESI: Supreme Court’s Liberal Approach

[Guest post by Richa Saraf, Assistant Legal Advisor at Vinod Kothari & Co.] In the case of M.D. Frozen Foods Exports Pvt. Ltd. v. Hero Fincorp Ltd.,[1] the Supreme Court held that there was no illegality in a non-banking finance company (“NBFC”) invoking the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI Act”) for recovery of...

Liability of Personal Guarantors of a Corporate Debtor during the Corporate Insolvency Resolution Process

[Guest post by Param Pandya, Research Fellow, Corporate Law and Financial Law, Vidhi Centre for Legal Policy, New Delhi. The views expressed by the author are personal.] On September 6, 2017, the Allahabad High Court in the case of Sanjeev Shriya vs. State Bank of India (“Sanjeev Case”) decided the question of the liability of personal guarantors of a company where moratorium under section 14 of...

Restrictive Remedy under Section 14 of the SARFAESI Act

[Guest post by Richa Saraf, Assistant Legal Advisor, Vinod Kothari & Co.] In a recent ruling of the Calcutta High Court in Union Bank of India & Anr. v. State of West Bengal & Ors. (September 1, 2017), the object and intention behind section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (the “Act”) was discussed. The...

Some Open Questions under the IBC: Debt Restructuring Schemes and Prepacks

[The following is a guest post contributed by Aparna Ravi, who is Counsel at Samvad Partners. The views expressed here are personal and comments are welcome.] In the high-profile insolvency case of Essar Steels Ltd., that was admitted by the Ahmedabad Bench of the National Company Law Tribunal (“NCLT”) last week, two objections raised by Essar against admission of the insolvency application were...

SEBI Requires Disclosure of Loan Defaults

Over the last couple of years, there has been a steady regulatory move to create some connections between the banking system and the capital markets in order to address cases of loan defaults by companies, especially those listed on the stock exchanges. Take the case of wilful defaulters, who are effectively now kept out of the capital markets (as discussed here on this Blog). Another mechanism...

NCLT Order Admitting Essar Steel Insolvency

In one of the first high profile cases under the Insolvency and Bankruptcy Code, 2016 (the “Code”), the Ahmedabad Bench of the National Company Law Tribunal (“NCLT”) yesterday issued its order admitting the insolvency petition brought by the State Bank of India (“SBI”) and Standard Chartered Bank (“SCB”) as financial creditors of Essar Steel Limited. The insolvency of Essar Steel had earlier...

More on RBI’s Intervention in Matters of Corporate Insolvency

The Gujarat High Court judgment discussed in a post yesterday by a guest contributor, Saurav Roy, brings to the fore several tricky issues and questions relating to the extent to which the Reserve Bank of India (RBI) ought to be involved in matters relating to the resolution of corporate insolvency. While matters of insolvency are essentially within the purview of the National Company Law...

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