Category: Banking

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 […]

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’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 […]

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 […]

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