[The following post is contributed by Vinod Kothari and Nidhi Bothra of Vinod Kothari & Co. The authors can be reached at [email protected] and [email protected] respectively] Introduction The Enforcement of Security Interest and Recovery of Debt Laws and Miscellaneous Provisions (Amendment) Act, 2016[1] (Amendment Act) has introduced several amendments to the Securitisation and...
Analyzing RBI’s Scheme on Structuring Big Ticket Stressed Assets
[The following guest post is contributed by Harsh Loonker, who is a 4th year student at the Jindal Global Law School, Sonipat] Introduction India’s central banking institution, the Reserve Bank of India (RBI), has issued guidelines on a Scheme for Sustainable Structuring of Stressed Assets.[1] These guidelines would mark a significant shift in reactive measures undertaken by regulators to act in...
Revitalising Distressed Assets Through the Joint Lenders Forum
[The following post is contributed by Dhanush. M, a 4th year studnent at the Jindal Global law School] The rapid growth of non-performing assets (NPAs), especially with regard to public sector banks (PSBs) is a major hurdle to the sustenance of the banking system. This prompted the Reserve Bank of India (RBI) to issue a paper in early 2014 titled “Framework ForRevitalising Distressed Assets and...
Lenders Empowered to Take Control over Distressed Firms
The Reserve Bank of India (RBI) yesterday conferred a significant power to banks to acquire control of borrower companies which fail to achieve prescribed milestones as part of their restructuring. Under this arrangement, the Joint Lenders’ Forum (or JLF, formed for the purpose of addressing distressed assets) may “convert the whole or part of the loan and interest outstanding into equity shares...
SEBI Board Decisions
SEBI announced a slew of decisions taken at its board meeting yesterday, which are excpected to have an impact on the capital markets, both primary and secondary. International Financial Services Centres (IFSCs) SEBI’s board has approved the SEBI (International Financial Services Centres) Guidelines, 2015, which will help establish IFSCs such as the proposed Gujarat International Finance Tec-City...
Constitutionality of the Amended Definition of “Non-Performing Asset” Upheld
[The following post is contributed by Prachi Narayan of Vinod Kothari & Company. She can be contacted at [email protected].] The Supreme Court in its judgment dated January 28, 2015 in Keshavlal Khemchand & Sons Pvt Ltd & Ors v. Union of India disposed off seventy petitions challenging the validity of the amended definition of Non Performing Asset (“NPA”) provided under section...
Revival of Sick Units Takes Precedence Over Loan Recovery
[The following post is contributed by Prachi Narayan of Vinod Kothari & Company. She can be contacted at [email protected]] The Supreme Court in its judgment in the case of KSL Industries Ltd vs. Arihant Threads Ltd on October 27, 2014 finally settled the position of law over the vexed issue of precedence of two special enactments, the Sick Industrial Companies (Special Provisions)...
Damodaran Committee Report: Impact on Impulsive Law Making
[In yesterday’s post, we had briefly discussed the publication of the Damodaran Committee on Reforming the Regulatory Environment for Doing Business in India, and its broad impact. In this post, Nidhi Bothra at Vinod Kothari & Co discusses the report in greater detail. Nidhi can be contacted at [email protected]] The Damodaran Committee was set up by the Ministry of Corporate Affairs to...
Draft Guidelines on Debt Restructuring
The Reserve Bank of India (RBI) has issued draft guidelines on “Review of Prudential Guidelines on Restructuring of Advances by Banks and Financial Institutions” that follows from the recommendations of the working group on the subject under the chairmanship of Mr. B. Mahapatra. The draft guidelines contain several technical details regarding prudential norms on income recognition, asset...
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