We discussed the recent decision of the Supreme Court in Southern Technologies that rejected a challenge to the constitutionality of ss. 36(1)(vii) and 43D of the Income Tax Act, 1961. The Court held that non-banking-financial institutions [“NBFC”] must account as income interest received from loans that are, for commercial purposes, bad debts. Four important issues were considered in the case:...
Legal Risks and Financial Sector; Capital Controls
Recent developments in the financial sector have witnessed a sea-change in the nature of legal risks faced by banks and financial institutions. Regulators, banks and financial institutions, as well as their legal advisors (both in-house and external) are required to constantly keep pace with the change. In that context, a recent speech by Shyamala Gopinath, Deputy Governor of the Reserve Bank of...
Venture Capital – Foreign and Domestic: Some Comparisons
Consistent with the expansion of the venture capital industry in India, the regulatory regime has been formulated with a view to foster such growth. While the domestic venture capital industry is governed by the SEBI (Venture Capital Funds) Regulations, 1996, the foreign venture capital industry (investing into Indian companies) is governed by the SEBI (Foreign Venture Capital Investors)...
Recent RBI Policies
RBI/2008-09/ The Reserve Bank of India (RBI) has announced some policies last week. The salient features are as follows: 1. External Commercial Borrowings (ECB) Policy – Liberalisation By a Circular dated January 2, 2009, the RBI dispensed with the requirement of all-in-cost ceilings on ECBs under the approval route, until June 30, 2009. This relaxation has now been extended until December...
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