TagSecuritisation

Securitization and Direct Assignment Transactions in the Indian Economy

[Vineet Ojha is Manager – IFRS & Valuation Services at Vinod Kothari Consultants Pvt Ltd] The current financial year has witnessed a sharp surge and a life time high in the volume of securitization and direct assignment transactions in the Indian economy. Consequent to the funding problems that non-banking finance companies (NBFC) and housing finance companies (HFCs) have been facing...

Creation and Operation of Tenancy Rights over Secured Assets under SARFAESI

[Samarth Saxena is a final year student at ILS Law College, Pune] The advent of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interests Act, 2002 (“SARFAESI”) ushered in a new era of reforms for the Indian banking regime. These reforms were primarily aimed at facilitating the speedy recovery of defaulting loans and thereby controlling the rising levels of non...

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...

SARFAESI Amendment: The “Qualified Buyers” Confusion Remains

[Akhileshwari Anand Raj is a 3rd year B.Com LL.B (Hons.) student at Gujarat National Law University, Gandhinagar] The amendments last year to the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) were long overdue. They sought to ensure that the various banking and recovery laws were in consonance with each other, and they also...

Application Under SARFAESI: Supreme Court’s Liberal Approach

[Guest post by Richa Saraf, Assistant Legal Advisor at Vinod Kothari & Co.] In the case of M.D. Frozen Foods Exports Pvt. Ltd. v. Hero Fincorp Ltd.,[1] the Supreme Court held that there was no illegality in a non-banking finance company (“NBFC”) invoking the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI Act”) for recovery of...

Restrictive Remedy under Section 14 of the SARFAESI Act

[Guest post by Richa Saraf, Assistant Legal Advisor, Vinod Kothari & Co.] In a recent ruling of the Calcutta High Court in Union Bank of India & Anr. v. State of West Bengal & Ors. (September 1, 2017), the object and intention behind section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (the “Act”) was discussed. The...

The Death of the “Absolute Interest”

[The following guest post is contributed by Aditya Swarup, who is an Assistant Professor at the Jindal Global Law School] In the seemingly complex world of corporate finance, creditors often face questions on the kind of security that ought to be taken by the them to support the loan to the borrower, answers to which depend on the relationship between debt and equity of the company. A further...

SARFAESI Amendment: A New Role for Debenture Trustees

[The following post is contributed by Vinod Kothari and Nidhi Bothra of Vinod Kothari & Co. The authors can be reached at [email protected] and [email protected] 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 Securitisation and...

Ushering a New Era for ARCs: Stamp Duty Exemption on Assignments

[The following post is contributed by Vinod Kothari and Nidhi Bothra of Vinod Kothari & Co. The authors may be reached at [email protected] and [email protected] respectively] Introduction Assignment of actionable claims/ receivables is achieved by an instrument, and such an instrument requires stamp duty. The United Kingdom (UK), Hong Kong, Malaysia and India are examples of...

Second Leg of SARFAESI: All Transactions to be Registered with CERSAI

[The following guest post is contributed by Niddhi Parmar of Vinod Kothari & Company. The author can be contacted at [email protected]] 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 22, 2016...

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