Will Our Balance Sheet Reflect A Picture Different From The Harsh Reality Of Mounting NPA’s?
The virus-induced lockdown has raised “Liquidity” and Non-Performing Assets (“NPA”) issues popularizing the buzzwords in financial circles and beyond. Anticipating a domino effect on loan defaults amongst small to medium-sized businesses, the Finance Ministry in conjoined efforts with Regulators and the Reserve Bank of India (RBI), introduced numerous measures for the maintenance of equilibrium between the market forces of […]
Will special purpose vehicles for NBFC funding help?
Special purpose vehicles (SPVs), a catchphrase during the 2008 financial crisis, have again taken center-stage as companies and financial institutions scramble for monies in a contracted economy in the wake of the pandemic. The key elements that led to the popularity of SPVs are bankruptcy-proof, absorptive capacity, flexibility, easy multiparty funding, longevity, and legitimacy. Empirical […]
Banks’ FY2021 recovery to take a hit as new IBC cases banned for a year
The suspension of fresh insolvency proceedings and coronavirus-related disruptions will impact recovery for lenders in fiscal 2021 as resolution mechanisms outside the Insolvency and Bankruptcy Code (IBC) are scarce, experts said. Sonam Chandwani, managing partner, KS Legal and Associates, believes that banks, primarily concerned over deteriorating asset quality due to the lockdown, have been crippled […]
The power of personalized banking
The banking sector, a bulwark against the breakdown of other industries, is left to nibble away the remnants in the wake of the virus-induced global economic slowdown. Banks wrote off over Rs 80,000 crore of loans in the first half of the financial year 2020. But major Indian banks have demonstrated resilience through uninterrupted services, […]
Fair-practice norms may prompt ARCs to cherry-pick deals, improve transparency
While the Indian stressed asset market is often seen as dismal, globalization has tightened the screws on the government and regulators to take decisive action. Earlier, India’s bad debt headache was alleviated somewhat with the introduction of the SARFAESI Act (Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest), allowing banks to recover […]
RBI On Revamping Loan Transfers
The watchdog and facilitator of monetary exchange recently proposed a new set of rules for the purpose of governing sales of stressed assets, which would entail greater flexibility to the lenders in the pricing of loans and in taking decisions as to whom they should sell to. RBI has released two draft frameworks to facilitate […]
RBI’s liquidity move for NBFCs, HFCs is a quick fix for a long-term problem
Non-banking finance companies (NBFC) constitute around 9% of total assets of the Indian financial sector. So, insulating them from potential bankruptcy has become imperative for the Reserve Bank of India (RBI) to ensure financial stability. And last week, the RBI unveiled a scheme aimed at improving the liquidity condition of NBFCs. The RBI announced that […]
Novelty to Necessity: The Power of Personalization in Banking
The banking sector – a bulwark against the breakdown of other industries is left to nibble from the remnants in the wake of the virus-induced global economic slowdown! Banks wrote off over ₹80,000 crore of loans in the first half of FY2020. The number exceeded ₹2 trillion in the past two years. But major Indian […]
Coronavirus effect: SEBI clamps down on companies! promoters, insiders can’t buy shares until June 30
The COVID-19 pandemic has reduced highway traffic to a bare minimum. People obsessively washing their hands every hour and not to forget the remarkable stock market crashes. The pandemic has brought catastrophic consequences both physically and financially. Next in line are the promoters and insiders of companies. The Securities and Exchange Board of India (SEBI) reportedly prohibited promoters and […]
HUMANIZING DEBT COLLECTIONS: A FAIR PRACTICES CODE FOR ARCs
While the depiction of Indian stressed asset market is often painted to look dismal, the global slowbalisation has put the screws on government and regulators to take decisive action. In a similar vein, India’s bad debt headache was alleviated with the inception of SARFAESI Act, allowing banks to recover monies without judicial intervention. Despite that, […]