TagRBI

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”)...

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...

More on RBI’s Intervention in Matters of Corporate Insolvency

The Gujarat High Court judgment discussed in a post yesterday by a guest contributor, Saurav Roy, brings to the fore several tricky issues and questions relating to the extent to which the Reserve Bank of India (RBI) ought to be involved in matters relating to the resolution of corporate insolvency. While matters of insolvency are essentially within the purview of the National Company Law...

Gujarat High Court Rules on RBI’s Powers Relating to Corporate Insolvency

[Guest post by Saurav Roy, IV B.A.LL.B, ILS Law College, Pune.]  Introduction Last week, the Gujarat High Court ruled on some interesting issues under the Insolvency and Bankruptcy Code 2016 (“IB Code”) while adjudicating upon a writ petition filed by Essar Steel Ltd., (“Essar”) against the Reserve Bank of India’s (“RBI”) decision to initiate insolvency proceedings against Essar and 11 other...

Delhi High Court on Put Options and Guarantees under FEMA

The issue of whether put options, exits at assured returns and guarantee arrangements between Indian and foreign parties are enforceable under the provisions of the Foreign Exchange Management Act, 1999 (FEMA) has received much regulatory and judicial attention lately. The dispute between Tata Sons and NTT Docomo heard by the Delhi High Court was being watched very closely until the case was...

The Introduction of Interest Rate Options In India

[The following guest post is contributed by Niharika Choudhary, who is a 4th year student at the National Law University, Jodhpur] Introduction Trade in financial derivatives has led to an enormous growth of the Indian financial system. New instruments have proliferated and trading volume has exploded. The use of financial derivatives has transformed the way financial institutions deal with risk...

Regulating India’s FinTech

[The following guest post is contributed by Vaibhav Parikh, who is a business lawyer associated with the Aditya Birla Group] “Disruption” is often used as a generic term to describe situations where smaller and newer companies with fewer resources are able to successfully challenge established incumbent businesses and upset status quo. Although a case has been made that it brings visibility to an...

Issue of Convertible Notes by Startups Permitted

[The following guest post is contributed by Bhushan Shah & Neha Lakshman from Mansukhlal Hiralal & Company. The views expressed in the post are personal] A convertible note is an instrument issued as debt and convertible into equity of a startup at the option of the holder, upon a future contingency taking place, usually when the startup obtains an additional round of investments...

Measuring outputs v. outcomes: Did the restriction on foreign investment in local debt achieve the intended outcome?

[The following guest post is contributed by Anurag Dutt, Arpita Pattanaik and Bhargavi Zaveri, who are researchers at the Finance Research Group at the Indira Gandhi Institute of Development Research, Mumbai.] A good policymaking process requires significant regulatory capacity. Before the policy is enacted, the State must (a) identify a market failure and an appropriate intervention to address...

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