[Megha Mittal is an Associate with Vinod Kothari & Co.] Amidst apprehensions of crypto-trading being a highly volatile and risk-concentric venture, the Supreme Court, in its order dated 4 March 2020 observed that the Reserve Bank of India (RBI), a staunch critic of cryptocurrencies, failed to present any empirical evidence substantiating cryptocurrency’s negative impact on the banking and...
Insolvency of Financial Service Providers and Third Party Rights Under Securitisation Contracts
[Richa Saraf is an Advocate] The Insolvency and Bankruptcy Code, 2016 (“Code”) does not, in general, deal with insolvency of financial service providers (“FSPs”), as FSPs are seen to be systemic and complex structures engaging in unique transactions. However, the collapse of Dewan Housing Finance Corporation Limited (“DHFL”) led to the notification of the Insolvency and Bankruptcy (Insolvency and...
Steering Committee Report on Digital Lending: Issues and Solutions
[Richa Saraf is a Legal Advisor at Vinod Kothari Consultants Pvt. Ltd.] The Department of Economic Affairs has recently released the Report of the Steering Committee on Fintech Related Issues, which discusses the various issues faced by fintech companies. This post seeks to focus on the issues pertaining to online lending, and the recommendations offer by the Steering Committee to address the...
Decoding India’s Regulatory Sandbox Program for Innovations in Financial Technology
[Anirban Roy Choudhury is a banking and finance lawyer, currently pursuing Master of Laws in Finance at the Institute for Law and Finance, Goethe University Frankfurt] Regulatory sandboxes are designed to provide a controlled environment for testing innovative financial or other products and services on a real-time basis, subject to certain regulatory safeguards and supervision. Its primary...
Open Banking Standard in the Indian Context
[Kishan Gupta is a B.A. LL.B. (Hons.) student at Dr. RML National Law University, Lucknow and Managing Editor of the RMLNLU Arbitration Law Blog] Understanding Open Banking Standard Until now, the names of large banks like SBI, ICICI and PNB were considered synonymous with custodian of customer’s financial data. Generally, these traditional banks store customer’s financial information for their...
Applicability of SARFAESI to Assignment of Loan by an NBFC
[Siddharth Tandon is a BB.A. LL.B student at National Law University, Jodhpur] The primary objective of enacting the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (or the SARFAESI Act) was to empower the financial institutions by identifying and remedying the problem of non-performing assets (NPA) by providing efficient solutions such as...
Taxation as a Form of Regulating Cryptocurrencies In India
[Samarth Chaudhari is a final year LL.B. student at Jindal Global Law School, Sonipat] Cryptocurrencies, derived from the innovation of blockchain technology, can function as a reliable online payment method with several benefits.[1] However, the Reserve Bank of India (RBI) has unambiguously prohibited all financial institutions regulated by it from dealing in cryptocurrencies and its related...
Chief Risk Officer: Strengthening Risk Management Practices
[Kanakprabha Jethani is with Vinod Kothari Consultants Private Limited] The Reserve Bank of India (RBI) issued a notification on 16 May 2019 requiring non-banking finance companies (NBFCs) having an asset-size exceeding the prescribed threshold to appoint a Chief Risk Officer (CRO) with clear roles and responsibilities to oversee their risk management practices. The CRO shall be required to...
Ordinance to Ban Unregulated Deposit Schemes: Bridging the Regulatory Gap
[Anirban Roy Choudhury is a banking and finance lawyer and an LL.M. (Finance) candidate at the Institute for Law and Finance, Goethe University Frankfurt] In spite of various legislation, including the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 and the Chit Funds Act, 1982, being in place throughout the last few decades, various entities regularly lured the unwary public with...
Consumer Protection and Payment Wallets – A Case for Tech-based Intervention
[Debanshu Mukherjee heads the Corporate Law and Financial Regulation vertical at the Vidhi Centre for Legal Policy, a New Delhi based independent think-tank. Shehnaz Ahmed is a Senior Resident Fellow at the Vidhi Centre for Legal Policy. Param Pandya is a Research Fellow at the Vidhi Centre for Legal Policy. An expanded version of this post has appeared in the Oxford Business Law Blog]...
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