Last week, the Supreme Court’s order constituting a committee to settle the ongoing farmer agitation was critiqued across the entire spectrum of left-to-right wing commentary. At about the same time, in a case involving PayPal, a popular online payment gateway service in India, the Delhi High Court passed an order directing the Finance Ministry to set up a committee to address the following...
Corporate Ownership in Private Banks: Setting the Cat among the Pigeons
[Pramod Rao is Group General Counsel, ICICI Bank. This post represents his personal views] With the release of the Reserve Bank of India’s (RBI) Report of the internal working group to review extant ownership guidelines and corporate structure for Indian private sector banks, several articles and commentaries have been published. What has attracted attention has been a...
Towards a Proportionate Regulatory Framework for Virtual Currencies
[Anshul Semwal is a 5th year B.A. LL.B. (Hons.) student at the National Law School of India University, Bangalore] On April 6, 2018, the Reserve Bank of India (‘RBI’), a staunch critic of virtual currencies (‘VCs’), issued a circular banning the trade of VCs. The ban was short-lived as, two years later, the Supreme Court quashed the circular on the ground of proportionality in Internet and Mobile...
ARCs and Insolvency Resolution Plans: The Enigma of Equity vs Debt
[Sikha Bansal is a Partner at Vinod Kothari & Company] A regulatory framework for asset reconstruction companies (ARCs) was introduced in India through the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). This intended to put in place a system for clearing up non-performing assets (NPAs) from the books of banks and financial...
The Banking Regulation (Amendment) Ordinance 2020: A New Beginning?
[Manasvini Vyas is a 5th year student at National Law University Odisha] On 26 June 2020, the Banking Regulation Act, 1949 (“the Act”) was amended by way of a presidential ordinance (the Ordinance’). The amendment seeks to bring urban cooperative banks (‘UCBs’) and multi-state cooperative banks (‘MCBs’) under the complete regulatory control of the RBI. This development assumes significance in the...
Corporate Restructuring in India: The Cross-Class Cramdown Provision
[Aastha Agarwalla is a final year law student at Campus Law Centre. Faculty of Law, University of Delhi] The United Kingdom (UK) recently enacted a much-awaited economic legislation, the Corporate Insolvency and Governance Act 2020 (CIGA). The CIGA introduces sweeping reforms, including a cross-class cramdown provision (CCDP), in the restructuring legal framework. The cramdown mechanism, inspired...
Cutting Corners through RBI’s Special Liquidity Scheme
[Shreya Dagar is a 3rd year B.A., LL.B. (Hons.) student at National Law University Jodhpur] In order to provide relief to non-banking finance companies (“NBFCs”), housing financing companies (“HFCs”) and microfinance institutions against the pandemic struck economy, the Government has approved a special liquidity scheme providing short-term liquidity to these entities. Earlier, the Reserve Bank...
Draft Framework for Securitisation of Standard Assets: Re-modelling the Indian Securities Market
[Adesh Sharma and Saksham Shrivastav are 3rd year B.A. LL.B. (Hons.) students at National University of Study and Research in Law, Ranchi] In an attempt to regulate the securities market in a more sophisticated direction and open up newer avenues, the Reserve Bank of India (‘RBI’) on June 8,2020 introduced the ‘Draft Framework for Securitisation of Standard Assets’ (‘Framework’)...
RBI’s Discussion Paper on Bank Governance
Corporate governance in banks and financial institutions has captured a great deal of attention lately in India. One may attribute this to high profile episodes involving governance issues in banks such as ICICI Bank as well as Yes Bank, both involving the former chief executive officers (CEOs). There is generally a sense that universal corporate governance norms prescribed by the securities...
Supreme Court on Applicability of SARFAESI to Co-operative Banks and the Banking (Amendment) Bill, 2020
[Karan Kamath is a B.A. LL.B. (Hons.) graduate from Symbiosis Law School, Pune. The author would like to thank Rohan Deshpande, counsel, Bombay High Court for his inputs and comments on a draft version] On 5 May 2020, a five-judge constitutional bench of the Supreme Court in Pandurang Ganpati Chaugule v. Vishwasrao Patil Murgud Sahakari Bank Limited ruled that co-operative banks could resort to...
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