The government of India promulgated an ordinance to suspended initiation of fresh insolvency proceedings for a period of six months to shield companies impacted by the outbreak of Covid-19. Ministry of Finance has announced that the Insolvency & Bankruptcy Code (“IBC”) proceedings under Section 7, 9 and 10 would be suspended for a period of…
The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002(SARFAESI Act 2002) provide for Enforcement of Security Interest for the realization of the dues without the intervention of Courts or Tribunals for recovery of NPAs by banks under various laws. In 2016 NBFC is included under the definition of the financial institution through…
The BSR-1 released by RBI at every quarter shows that small borrowal accounts the credit limit up to ₹ 0.2 million constitute only a share of 7.3 percent in total outstanding credit of the banks. From the above stats, we may infer that it is the large borrowers who have been heavily damaging banking industries…
On Friday (April 17), the Reserve Bank of India announced freezing of classification of non-performing assets for three months starting March 1, in view of the widespread impact of the Covid-19 pandemic and the subsequent nationwide lockdown. “In respect of all accounts for which lending institutions decide to grant moratorium and which were standard as…
In terms of the existing Prudential Framework, lenders are required to implement a resolution plan in respect of entities in default within 180 days from the end of Review Period of 30 days. As announced in the RBI Governor’s statement on Friday (17.04.2020), on a review aimed at alleviating the lingering impact of Covid19 on…
[This writing provides insight of internal and external causes of rural indebtedness, challenges before banks and financial institution in rural areas, operation of formal and informal lending system in rural areas and discusses experts’ suggestion on facing high level of delinquency in lending to agriculture sector especially to small and marginal farmers, oral lessees, tenant…
Today (29.11.2019) RBI has filed an application under insolvency and liquidation proceeding against “ Dewan Housing Finance Corporation Limited” under Section 227 read with clause (zk) of sub-section (2) of Section 239 of the Insolvency and Bankruptcy Code (IBC), 2016, read with Rules 5 and 6 of the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings…
On Friday (15th November 2019), the Ministry of Corporate affairs notified “Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019”. [TO BE PUBLISHED IN THE GAZETTE OF INDIA, PART II, SECTION 3, SUBSECTION (i)]. The new rule called in short as “Insolvency and Bankruptcy rule 2019” shall come…
In the light of Hon’ble Supreme Court order dated April 2, 2019, which held the RBI circular dated February 12, 2018 on Resolution of Stressed Assets as ultra vires, the Reserve Bank of India on Friday (June 7, 2019) released fresh guidelines to deal with bad loans. The new directions shall be called the ‘Reserve…
(This post elucidates on recovery and monitoring process of NPA accounts,advantage and disadvantage of Compromise settlement, and gains of NPA recovery) The asset of the bank, classified as NPA ceases to generate income to the bank. In addition to stoppage of income generation to the banks, banks are required to make provision for NPA. Therefore,…