TagNon-banking Finance Companies

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...

Regulation of invoice discounting start-ups: Is RBI proposing a disproportionate regulation?

[The following guest post is contributed by Srinivas Medisetty, who is presently working as a legal counsel in Ola (ANI Technologies Private Limited) advising on the regulatory and litigation aspects of the company. Views expressed are personal.] The Securities and Exchange Board of India (“SEBI”) as the capital market regulator rightly stepped in to regulate crowd funding through investment in...

Liberalization of RBI’s Policies

The Reserve Bank of India (RBI) last week issued a series of circulars liberalizing and streamlining its policies on various types of equity investments as well as on external commercial borrowings (ECBs). The key pronouncements are highlighted below: 1.         Foreign Investment in “Other Financial Services” In the case of non-banking finance companies...

The Inapplicability of Money Lending Laws to Regulated NBFCs

[The following guest post is contributed by Munmi Phukon, who is a Senior Manager in the Corporate Law Division at Vinod Kothari & Co.] Introduction In 2011, a landmark judgment of the Gujarat High Court in Radhe Estate Developers Vs. Versus Mehta Integrated Finance Co. Ltd. and Ors (the ‘Gujarat Ruling’) contested the very fact of applicability of the Bombay Money Lending Act, 1946 (the...

NBFC Master Directions 2016: An Analysis

[The following guest post is contributed by Surbhi Jaiswal of Vinod Kothari & Co. She can be reached at [email protected]] On 1 September, 2016, the Reserve Bank of India (RBI) issued two new sets of master directions, namely the Master Direction – Non-Banking Financial Company – Non-Systemically Important Non-Deposit taking Company (Reserve Bank) Directions, 2016 and the Master...

SARFAESI Amendment: A New Role for Debenture Trustees

[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...

RBI Issues Guidelines for “On Tap” Licensing of Private Universal Banks

In the past, the Reserve Bank of India (RBI) has been following a “stop and go” policy for licensing of new banks in the private sector. Under this policy, and on the last occasion in 2014, two private sector banks were granted licences to operate banks. However, this policy has been under review and discussion over the last few years. Consequently, the RBI in May this year issued the Draft...

Venture Debt in India

[The following guest post is contributed by Dhanush M, who is a student at the Jindal Global Law School] It is an established convention that “Debt and startups don’t mix”. This could be attributed to the fact that the business models of banks and non-banking finance companies (NBFCs) who are the primary lenders in debt are built around collaterals like plant and machinery. Furthermore, lending...

Analysis of RBI’s Draft Guidelines for On-tap Licensing of Universal Banks in the Private Sector

[The following guest post is contributed by Aditya Sood, who is a 4th year BA, LLB (Hons) student at the West Bengal National University of Juridical Sciences, Kolkata] The Reserve Bank of India (RBI) on May 5, 2016 released Draft Guidelines for on-tap licensing of universal banks in private sector in India (“Draft Guidelines”).[1] The Draft Guidelines, if accepted, would mark a significant shift...

Second Leg of SARFAESI: All Transactions to be Registered with CERSAI

[The following guest post is contributed by Niddhi Parmar of Vinod Kothari & Company. The author can be contacted at [email protected]] Introduction The Central Government introduced the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (Central Registry) Amendment Rules, 2016 (hereinafter referred as ‘Amendment Rules, 2016’) on January 22, 2016...

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