TagRBI

Real Estate Intermediaries: A Missed Opportunity in the Recent ECB Framework?

[Bhavin Gada, Soumya Shanker and Sharan Sanil are with M/s Economic Laws Practice, Advocates and Solicitors. The views of the authors are personal] Recently, the Reserve Bank of India (“RBI”), through the Foreign Exchange Management (Borrowing and Lending) Regulations, 2018, consolidated all the erstwhile foreign exchange regulations governing the borrowing and lending in foreign currency or...

RBI Notifies New Framework Policy for External Commercial Borrowings

[Nidhisha Garg is a 3rd year B.A., LL.B (Hons.) student at the National Law Institute University, Bhopal] On 16 January 2019, the Reserve Bank of India (RBI) notified the new policy for External Commercial Borrowings (ECB). It seeks to revise the policy that was earlier in place by virtue of the Master Direction on External Commercial Borrowings dated 1 January 2016, as updated from time to time...

RBI’s Amendment to the Hedging Policy for ECBs: Reasoning and Impact

[Saher Fatima and Siddharth Tandon are III year students at the National Law University, Jodhpur] Introduction Over the years, external commercial borrowings (“ECB”) have become a preferred source of finance for Indian entities. ECBs refer to commercial loans in the form of bank loans, securitized instruments, buyers’ credit or suppliers’ credit availed of from non-resident lenders with a minimum...

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’s Measures for NBFCs and HFCs

[Vineet Ojha is a Manager at Vinod Kothari Consultants Pvt Ltd] In most developed nations, the bond market is often several multiples larger than the equity market. The same cannot be said about the India’s corporate bond market, as it is still underdeveloped and therefore unable to meaningfully share the credit burden of the banking system. To ease the funding strains non-bank lenders face and...

Payments Regulatory Board: Merits and Criticisms

[Tishya Saran and Aayush Grover are both 5th year students of Government Law College, Mumbai] Introduction The Reserve Bank of India (“RBI”) and the Central Government seem to be embroiled in a regulatory tussle. It all started when an Inter-Ministerial Committee (the “Committee”) set up by the Department of Economic Affairs, in a report published by it (the “Report”), proposed the establishment...

Promoter’s Stake in Private Banks and Kotak Mahindra Bank’s Preference Share Issue

[Anirudh Goyal and Vishal Hablani are 4thand 3rdYear B.A.L.L.B. (Hons.) students respectively at West Bengal National University of Juridical Sciences, Kolkata] The Reserve Bank of India (“RBI”) on 14 August 2018 took the view that the recent issue of preference shares by Kotak Mahindra Bank to dilute the stake of Uday Kotak, the promoter of bank, does not meet the regulatory norms. The bank on 2...

Investment by FPIs in Securitised Debt Instruments

[Anita Baid is a Senior Manager at Vinod Kothari Consultants P. Ltd] Investments by foreign portfolio investors (FPIs) in unlisted debentures and securitised debt instruments (SDIs) issued by Indian companies was allowed pursuant to a notification dated 27 February, 2017 issued by the Securities and Exchange Board of India (SEBI). Earlier in November, 2016, the Reserve Bank of India (RBI) had...

Cryptocurrency Investment Vehicles in India: Possibilities and Challenges – Part 2

[Job Michael Mathew is a 4th year BA.LL.B (Hons) student at NALSAR University of Law. The first part is available here.] Commodity Mutual Funds and Exchange Traded Funds? In light of the above discussion, an investment vehicle like a mutual fund that invests in cryptocurrency and issues units of the fund in return for investing in the fund can be termed a commodity mutual fund since the...

The Risky Truth about Investments by Banks: The RBI’s Amendment To Financial Services Directions

[Utsav Gandhi is a corporate lawyer based in Bangalore] Introduction The Reserve Bank of India (“RBI”) last month amended the Master Direction – Reserve Bank of India (Financial Services provided by Banks) Directions, 2016 (“Directions”). This allows banks to invest in a multitude of entities such as Real Estate Investment Trusts (“REITs”), Infrastructure Investment Trusts (“InvITs”)...

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