Tag: Non-banking Finance Companies
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Liberalization of RBI’s Policies
[Posted by Umakanth Varottil] 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…
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The Inapplicability of Money Lending Laws to Regulated NBFCs
[Posted by Umakanth Varottil] [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’)…
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NBFC Master Directions 2016: An Analysis
[Posted by Umakanth Varottil] [The following guest post is contributed by Surbhi Jaiswal of Vinod Kothari & Co. She can be reached at surbhi@vinodkothari.com.] 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…
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SARFAESI Amendment: A New Role for Debenture Trustees
[Posted by Umakanth Varottil] [The following post is contributed by Vinod Kothari and Nidhi Bothra of Vinod Kothari & Co. The authors can be reached at vinod@vinodkothari.com and nidhi@vinodkothari.com 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…
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RBI Issues Guidelines for “On Tap” Licensing of Private Universal Banks
[Posted by Umakanth Varottil] 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…
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Venture Debt in India
[Posted by Umakanth Varottil] [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…
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Analysis of RBI’s Draft Guidelines for On-tap Licensing of Universal Banks in the Private Sector
[Posted by Umakanth Varottil] [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…
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Second Leg of SARFAESI: All Transactions to be Registered with CERSAI
[Posted by Umakanth Varottil] [The following guest post is contributed by Niddhi Parmar of Vinod Kothari & Company. The author can be contacted at parmar@vinodkothari.com] 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…
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Adoption of Indian Accounting Standards (Ind AS) by Banks, Insurance Companies and NBFCs – Effects of Transition and Potential Hurdles
[Posted by Umakanth Varottil] [The following guest post is contributed by Arka Saha, who is a 4th Year B.A.LL.B. (Hons) & Executive Student in CS (ICSI) at National Law University Odisha (NLU-O)] To bring about systemic convergence of financial reporting standards in vogue in the case of Indian banking companies, Insurance companies and Non-banking Financial…
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Subordinated debentures – A Capital Supporting Instrument
[Posted by Umakanth Varottil] [The following guest post is contributed by Vinita Nair of Vinod Kothari & Co. The author may be contacted at vinita@vinodkothari.com] Non Banking Financial Companies (NBFCs) in India are always seeking sources of raising funds. Capital is costly and therefore NBFCs rely more on public funds. Public funds as defined under…