TagNon-banking Finance Companies

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...

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...

Securitization and Direct Assignment Transactions in the Indian Economy

[Vineet Ojha is Manager – IFRS & Valuation Services at Vinod Kothari Consultants Pvt Ltd] The current financial year has witnessed a sharp surge and a life time high in the volume of securitization and direct assignment transactions in the Indian economy. Consequent to the funding problems that non-banking finance companies (NBFC) and housing finance companies (HFCs) have been facing...

Prompt Corrective Action

[Manal Shah is a B.A. LL.B. (Hons.) student at the National University of Advanced Legal Studies, Kochi and writes at thesecuritiesblawg.in] Prompt corrective action (“PCA”) is intended to “intervene early and take corrective measures in a timely manner, so as to restore the financial health of banks that are at risk by limiting deterioration in their health and preserving their capital levels”...

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...

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