The National Company Law Tribunal (NCLT) is the adjudicating authority (quasi-judicial authority) for the insolvency resolution process of companies and limited liability partnerships under the Insolvency and Bankruptcy Code, 2016. Previously, there were four different legal forums viz. High Courts, Company Law Boards, Board for Industrial and Financial Reconstruction (BIFR), and Debt Recovery Tribunal (DRT)…
Updated on June 8, 2020 In view of the extension of moratorium by another three months, i.e., up to August 31, 2020, Government has decided to continue the availability of 2% Interest Subvention and 3% Prompt repayment Incentive (PRI) to farmers for the extended period of repayment up to August 31, 2020, or date of…
(The following post explains the difference between Funded Interest Term Loan (FITL) and Working Capital Term Loan (WCTL) What is FITL? Funded Interest Term Loan in a short form known as FITL. When the manufacturing units face severe financial crises, not able to meet their loan obligations, banks extend the FITL facility to such units…
According to news reports, Bankers are unhappy to learn that the newly envisaged Rs.20000 crore loan guarantee scheme for micro, small and medium enterprises (MSMEs) will not be available from the Government of India as expected but from the credit guarantee trust fund for micro and small enterprises (CGTMSE). CGTMSE guarantee has its caveats, it…
With the economy hit by the COVID-19 crisis, banks are now preparing for a possible spike in bad loans. According to experts, bad loans (NPAs) of the banks are expected to rise to 11-11.5% of the total advances by March 2021. In this context of default risk by the COVID induced lockdown continues to exacerbate…
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 Thursday (April 23, 2020) Reserve Bank of India permitted all scheduled commercial banks to issue electronic cards to natural persons having Overdraft Accounts. The cards will be issued to accounts in the nature of personal loan without any specific end-use restrictions. Hitherto, banks have been permitted to issue debit cards to customers having Saving…
RBI today (April 21, 2020) announced that “to ensure that farmers do not have to pay penal interest and at the same time continue getting the benefits of interest subvention scheme, Government has decided to continue the availability of 2% IS and 3% PRI to farmers for the extended period of repayment up to 31.05.2020…
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…