The Reserve Bank of India (RBI) has identified 12 large stressed loan accounts totaling about 25% of gross NPAs for immediate reference under the Insolvency and Bankruptcy Code. The accounts have a combined fund and non-fund based outstanding amount greater than Rs. 5,000 crore and are classified as 60% or more NPAs. RBI has constituted an Internal Advisory Committee that met on June 12th and recommended these initial 12 accounts. RBI will issue directions to banks to initiate insolvency resolution for these accounts, which will be accorded priority by tribunals. For other large NPAs, banks must finalize resolution plans within 6 months or initiate insolvency proceedings. RBI will also
RBI GUIDELINES: GUIDELINES FOR COMPROMISE SETTLEMENT OF DUES OF BANKS AND FIN...GK Dutta
As you are aware, the Indian Banks’ Association (IBA) has been issuing guidelines to member institutions for taking up of cases for settlement through Lok Adalats. The position
was reviewed and it was observed that banks have not taken adequate advantage of the Lok Adalats for compromise settlement of their NPAs. There are certain advantages in using the forum of Lok Adalats by banks and financial institutions in compromise settlement of their NPAs. There are no court fees involved when fresh disputes are referred to it. It can take cognizance of any existing suit in the court as well as look into and adjudicate upon fresh disputes. If no settlement is arrived at, the parties can continue with court proceedings. Its decrees have legal status and are binding. It has, therefore, been decided that with a view to making increasing use of the forum of Lok
Adalats to settle banking disputes involving smaller amounts, banks and financial institutions should follow the following guidelines for implementation.
RBI GUIDELINES: ONE TIME SETTLEMENT OF NPAS DATED 16-MARCH-2018GK Dutta
As per instructions of Reserve Bank of India (RBI), banks are required to have a loan recover policy, which may cover, inter
alia, negotiated settlements of NPAs. As per inputs received from Public Sector Banks (PSBs), all PSBs have One Time
Settlement (OTS) schemes. These OTS schemes are in pursuance of Board-approved policies of banks, and are typically
oriented towards sectors such as agriculture, Micro Small and Medium Enterprises (MSMEs), weaker sections and
education loans, and typically have an upper limit on the amount of NPA.
RBI GUIDELINES: GUIDELINES FOR COMPROMISE SETTLEMENT OF DUES OF BANKS AND FIN...GK Dutta
As you are aware, the Indian Banks’ Association (IBA) has been issuing guidelines to member institutions for taking up of cases for settlement through Lok Adalats. The position
was reviewed and it was observed that banks have not taken adequate advantage of the Lok Adalats for compromise settlement of their NPAs. There are certain advantages in using the forum of Lok Adalats by banks and financial institutions in compromise settlement of their NPAs. There are no court fees involved when fresh disputes are referred to it. It can take cognizance of any existing suit in the court as well as look into and adjudicate upon fresh disputes. If no settlement is arrived at, the parties can continue with court proceedings. Its decrees have legal status and are binding. It has, therefore, been decided that with a view to making increasing use of the forum of Lok
Adalats to settle banking disputes involving smaller amounts, banks and financial institutions should follow the following guidelines for implementation.
RBI GUIDELINES: ONE TIME SETTLEMENT OF NPAS DATED 16-MARCH-2018GK Dutta
As per instructions of Reserve Bank of India (RBI), banks are required to have a loan recover policy, which may cover, inter
alia, negotiated settlements of NPAs. As per inputs received from Public Sector Banks (PSBs), all PSBs have One Time
Settlement (OTS) schemes. These OTS schemes are in pursuance of Board-approved policies of banks, and are typically
oriented towards sectors such as agriculture, Micro Small and Medium Enterprises (MSMEs), weaker sections and
education loans, and typically have an upper limit on the amount of NPA.
By Mukund P Unny
The practice of lending and borrowing is millenniums old. The concept of banking was incepted ever since humans started engaging in economic transactions of any kind. The banking system has evolved since then. We have well-established banks now in the 21st century-huge ones having more than $1 trillion in assets. The banking (or credit) sector is one that hold the reins of the world economy. Without the presence of a well-established credit-system, we cannot expect the economy to roll on. A dynamic banking system is essential for a thriving economy.
NBFC is a non banking financial company which was registered under Section 45-I of RBI. It is a promising sector to provide loan and advances to retail customers. NBFC should be a company which is registered under the Section 3 of Companies Act 1956 & must have a net fund of Rs 200 lakhs. Know more insight details about NBFC Registration by contacting our experts at https://swaritadvisors.com/nbfc-registration
In the attached handbook, we have included major legal compliance applicable on NGOs in India under Income Tax Act, Foreign Contribution Regulation Act, Payment of Gratuity Act, Provident Fund & Misc Provisions Act. #ngos #Taxation #Compliances #SNR #krestonsnr
NON PERFORMING ASSETS – NEED FOR PRAGMATIC & PRACTICAL REGULATORY FRAMEWORK Neha Sharma
The Reserve Bank of India, Indian Banks Association, almost all Public Sector Banks and the Indian businesses are deeply concerned about significant rise in nonperforming assets during last one year. The Indian economy has been passing through unprecedented turbulent times. Many important sectors of the economy have been adversely affected.
Indian Banking Moving towards a new landscape - Regulatory Mechanisms - Part...Resurgent India
RBI has progressively made it easier for banks to recognize and deal with loans extended to distressed projects. RBI offers a lot of flexibility to banks in dealing with the stressed asset problem.
By Mukund P Unny
The practice of lending and borrowing is millenniums old. The concept of banking was incepted ever since humans started engaging in economic transactions of any kind. The banking system has evolved since then. We have well-established banks now in the 21st century-huge ones having more than $1 trillion in assets. The banking (or credit) sector is one that hold the reins of the world economy. Without the presence of a well-established credit-system, we cannot expect the economy to roll on. A dynamic banking system is essential for a thriving economy.
NBFC is a non banking financial company which was registered under Section 45-I of RBI. It is a promising sector to provide loan and advances to retail customers. NBFC should be a company which is registered under the Section 3 of Companies Act 1956 & must have a net fund of Rs 200 lakhs. Know more insight details about NBFC Registration by contacting our experts at https://swaritadvisors.com/nbfc-registration
In the attached handbook, we have included major legal compliance applicable on NGOs in India under Income Tax Act, Foreign Contribution Regulation Act, Payment of Gratuity Act, Provident Fund & Misc Provisions Act. #ngos #Taxation #Compliances #SNR #krestonsnr
NON PERFORMING ASSETS – NEED FOR PRAGMATIC & PRACTICAL REGULATORY FRAMEWORK Neha Sharma
The Reserve Bank of India, Indian Banks Association, almost all Public Sector Banks and the Indian businesses are deeply concerned about significant rise in nonperforming assets during last one year. The Indian economy has been passing through unprecedented turbulent times. Many important sectors of the economy have been adversely affected.
Indian Banking Moving towards a new landscape - Regulatory Mechanisms - Part...Resurgent India
RBI has progressively made it easier for banks to recognize and deal with loans extended to distressed projects. RBI offers a lot of flexibility to banks in dealing with the stressed asset problem.
Indian economy towards growth momentum strategic moves neededNeha Sharma
In a recent international survey Indian economy has been rated as the 3rd largest economy of the world, after USA and China, on the basis of Purchase Power Parity (PPP). IMF has also projected a smart recovery of growth rate of Indian GDP to around 5.5% to 6% in next 2 years.
Indian economy towards growth momentum strategic moves neededNeha Sharma
In a recent international survey Indian economy has been rated as the 3rd largest economy of the world, after USA and China, on the basis of Purchase Power Parity (PPP). IMF has also projected a smart recovery of growth rate of Indian GDP to around 5.5% to 6% in next 2 years.
FRDI (Financial Resolution And Deposit Insurance)Srujith Reddy
The Union Cabinet chaired by Prime Minister Narendra had approved the proposal to introduce a Financial Resolution and Deposit Insurance (FRDI) Bill in June 2017.
Licensing new banks in private sector is a bold step in the path of financial sector reforms. In fact the ball was set rolling after the Union Finance Minister in his Budget Speech 2010-11 made a significant announcement that: “RBI is to consider giving some additional banking licenses to private sector players.” The objective is clear and loud: to extend banking outreach, instill competitive efficiency, bring in new technology and achieve inclusive growth.
RBI issued the final “Guidelines for Licensing of New Banks in the Private Sector” in February 2013 after taking into account the important amendments to the Banking Regulation Act, 1949, feedbacks received from the public, and consultation with the Central Government.
An innovative corporate structure of the promoters of banks is prescribed. Entities / groups in the private sector and entities in the public sector shall be eligible to promote a bank through a Non–Operative Financial Holding Company (NOFHC). The corporate structure is designed to ring-fence the banks from spill-over risks from other entities of the group.
Financial inclusion has emerged as major policy plank of the Centre and RBI. The task is challenging with large population and the geographical spread of our country. The data released from the recent Census of India shows that only 54.4 per cent of rural households have access to banking services
RBI received 26 applications for bank license. On the recommendations of a High Powered Committee headed by Dr Bimal Jalan, former RBI Governor, RBI, issued "in principle" approval to two entities viz IDFC ( an NBFC) and Bandhan( NBFC-MFI) to set up banks. Presently they are functioning as NBFCs; they need to obtain license from RBI under Sec 22 of the Banking Regulation Act, 1949.
. The earlier experimentation of bank licensing infused the much needed competition and technology in the banking sector. Notably, the business models adopted by these banks support class banking, profit maximization and risk-taking. Expectedly, the new generation banks would bring an evolutionary change to meet the “needs of modern economy” and alongside “improve access to banking services” to the lower strata of the society.
BASEL CORE PRINCIPLES FOR EFFECTIVE BANKING SUPERVISION DETAILED ASSESSMENTJalaj Jain
The Reserve Bank of India (RBI) is to be commended for its tightly controlled
regulatory and supervisory regime, consisting of higher than minimum capital
requirements, frequent, hands-on and comprehensive onsite inspections, a conservative
liquidity risk policy and restrictions on banks’ capacity to take on more volatile
exposures. The Indian banking system remained largely stable during the global financial
crisis. Since then, the government of India and RBI have taken additional measures to
enhance the soundness and resilience of the banking system, such as the establishment of a
Financial Stability and Development Council (FSDC), the implementation of a
countercyclical provisioning regime, and the development of a roadmap for the introduction
of a holding company structure.
This is a latest development in Indian banking landscape after the Government of India announced the intention to license new commercial banks in private sector. Reserve bank of India, the banking regulator has set the process. This is a milestone development in Indian banking landscape. Final guidelines would be issued by Reserve Bank after necessary dialogue with government.
Large Bank Borrowers - Are they willful defaultersNeha Sharma
The RBI advisory for mandatory provisions of Non-Performing Assets and inclusion of most of the top borrowers in the list of 150 groups covering lakhs of crores of borrowings has brought to surface a very major issue.
A powerful presentation on non performing assets which very much influencial when presented before others. Being a law student, I myself created the presentation and presented before the elite authorities which impressed them to a larger extent.
Overall banking system on agrani bank ltdAsad Saimon
Agrani Bank being one of the largest nationalized commercial bank must shoulder the responsibility of expanding its network in rural area. Presently bank has its 561 branches out of total 891 branches located in rural areas implementing as many as 29 programs targeting rural people.
INCOME DECLARATION SCHEME A time to come cleanNeha Sharma
The IDS scheme announced by the government is open till 30th September, 2016. It is an important opportunity and the government has committed to not to seek any details or source of money earned and assets created once disclosed in terms of the scheme.
IBC Ordinance: Snapshot of Some Key ChangesShruti Jadhav
Yesterday, the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018 (“Ordinance”) was promulgated. The Ordinance introduces several significant changes to the Insolvency and Bankruptcy Code, 2016. We have attached a note providing a snapshot of some of the key changes which have been introduced.
RIGHTS OF VICTIM EDITED PRESENTATION(SAIF JAVED).pptxOmGod1
Victims of crime have a range of rights designed to ensure their protection, support, and participation in the justice system. These rights include the right to be treated with dignity and respect, the right to be informed about the progress of their case, and the right to be heard during legal proceedings. Victims are entitled to protection from intimidation and harm, access to support services such as counseling and medical care, and the right to restitution from the offender. Additionally, many jurisdictions provide victims with the right to participate in parole hearings and the right to privacy to protect their personal information from public disclosure. These rights aim to acknowledge the impact of crime on victims and to provide them with the necessary resources and involvement in the judicial process.
A "File Trademark" is a legal term referring to the registration of a unique symbol, logo, or name used to identify and distinguish products or services. This process provides legal protection, granting exclusive rights to the trademark owner, and helps prevent unauthorized use by competitors.
Visit Now: https://www.tumblr.com/trademark-quick/751620857551634432/ensure-legal-protection-file-your-trademark-with?source=share
ASHWINI KUMAR UPADHYAY v/s Union of India.pptxshweeta209
transfer of the P.I.L filed by lawyer Ashwini Kumar Upadhyay in Delhi High Court to Supreme Court.
on the issue of UNIFORM MARRIAGE AGE of men and women.
Car Accident Injury Do I Have a Case....Knowyourright
Every year, thousands of Minnesotans are injured in car accidents. These injuries can be severe – even life-changing. Under Minnesota law, you can pursue compensation through a personal injury lawsuit.
NATURE, ORIGIN AND DEVELOPMENT OF INTERNATIONAL LAW.pptxanvithaav
These slides helps the student of international law to understand what is the nature of international law? and how international law was originated and developed?.
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ALL EYES ON RAFAH BUT WHY Explain more.pdf46adnanshahzad
All eyes on Rafah: But why?. The Rafah border crossing, a crucial point between Egypt and the Gaza Strip, often finds itself at the center of global attention. As we explore the significance of Rafah, we’ll uncover why all eyes are on Rafah and the complexities surrounding this pivotal region.
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What makes Rafah so significant that it captures global attention? The phrase ‘All eyes are on Rafah’ resonates not just with those in the region but with people worldwide who recognize its strategic, humanitarian, and political importance. In this guide, we will delve into the factors that make Rafah a focal point for international interest, examining its historical context, humanitarian challenges, and political dimensions.
Introducing New Government Regulation on Toll Road.pdfAHRP Law Firm
For nearly two decades, Government Regulation Number 15 of 2005 on Toll Roads ("GR No. 15/2005") has served as the cornerstone of toll road legislation. However, with the emergence of various new developments and legal requirements, the Government has enacted Government Regulation Number 23 of 2024 on Toll Roads to replace GR No. 15/2005. This new regulation introduces several provisions impacting toll business entities and toll road users. Find out more out insights about this topic in our Legal Brief publication.
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Military Commissions Trial Judiciary, Guantanamo Bay, Cuba. Notice of the Chief Defense Counsel's detailing of LtCol Thomas F. Jasper, Jr. USMC, as Detailed Defense Counsel for Abd Al Hadi Al-Iraqi on 6 August 2014 in the case of United States v. Hadi al Iraqi (10026)
1. RBI IDENTIFIES ACCOUNTS FOR
INSOLVENCY RESOLUTION
June 14, 2017
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M U M B AI I D E L H I I B E N G AL U R U I K O L K A T A I C H E N N AI BANKING AND FINANCE UPDATE
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Banking & Finance Update: RBI identifies accounts for insolvency resolution
Introduction
In the last 6 months since the corporate insolvency regime
kicked in, very few applications have been filed by banks to
initiate a corporate insolvency resolution process under the
Insolvency and Bankruptcy Code, 2016 (“Code”).
One of the concerns for banks while dealing with stressed assets
has been the apprehension of bank officials coming under
scrutiny if any of their decisions related to resolution of stressed
assets lead to legitimate commercial losses. Whilst amendments
have been proposed to the Prevention of Corruption Act, 1988 in
order to address such apprehensions, the amendments are still
awaiting the Parliament’s clearance.
Another step in the direction of aiding prompt resolution of
stressed assets by banks was the Banking Regulation
(Amendment) Ordinance, 2017 (“Ordinance”). Pursuant to the
Ordinance, which was promulgated on May 4, 2017, the
Banking Regulation Act, 1949 (“Act”) was amended. Section
35AA was inserted in the Act, which provides that the Central
Government may authorise the Reserve Bank of India (“RBI”) to
issue directions to any bank to initiate insolvency resolution
process under the Code on the occurrence of a default (as
defined in the Code).
Further, section 35AB was inserted in the Act, which empowers
RBI to issue directions to banks for resolution of stressed assets.
RBI was also empowered to specify one or more authorities or
committees, having such members as RBI may appoint or
approve for appointment, to advise banks on resolution of
stressed assets.
On June 13, 2017, the Reserve Bank of India (“RBI”) issued a
press release in connection with the accounts identified for
reference under the Code.
Action plan to implement the
Ordinance
RBI, in a press release issued on May 22, 2017, outlined the steps
taken and those proposed to be taken pursuant to the
Ordinance.
The press release mentioned that RBI was working on a
framework to facilitate an objective and consistent decision
making process with regard to cases that may be determined
for reference for resolution under the Code. It was further
mentioned that RBI would be constituting a committee
comprising majorly of its independent board members to advise
it in this matter.
Identification of accounts for
insolvency resolution
An Internal Advisory Committee (“IAC”) was constituted by RBI,
which held its first meeting on June 12, 2017. At this stage, the
focus of the IAC is on large stressed accounts and accordingly
the IAC took up for consideration the accounts which were
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Banking & Finance Update: RBI identifies accounts for insolvency resolution
classified partly or wholly as non-performing assets (“NPA”) from
amongst the top 500 exposures in the banking system.
All accounts with fund and non-fund based outstanding amount
greater than Rs. 5,000 crore, with 60% or more classified as NPAs
by banks as of March 31, 2016, were recommended by the IAC
for reference under the Code. Based on this criteria, 12 accounts
totaling about 25% of the current gross NPAs of the banking
system qualified for immediate reference under the Code.
In furtherance of the above, RBI will be issuing directions to banks
to initiate an insolvency resolution process under the Code in
respect of the identified accounts and such cases will be
accorded priority by the National Company Law Tribunal (i.e.
the Adjudicating Authority under the Code).
Resolution of other accounts
In connection with NPAs which do not qualify under the
aforesaid criteria, the IAC has recommended that banks should
finalise a resolution plan within 6 months. In cases where a
viable resolution plan is not agreed upon within 6 months, banks
will be required to initiate the insolvency resolution process
under the Code.
RBI will also be releasing the resolution framework with respect
to other NPA accounts.
Provisioning norms
Currently, there is no relaxation of provisioning norms in respect
of accounts where an insolvency resolution process has been
initiated.
RBI’s press release provides that revised provisioning norms will
be issued for cases accepted for resolution under the Code.
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Banking & Finance Update: RBI identifies accounts for insolvency resolution
DISCLAIMER
This document is merely intended as an update and is merely for
informational purposes. This document should not be construed as
a legal opinion. No person should rely on the contents of this
document without first obtaining advice from a qualified
professional person. This document is contributed on the
understanding that the Firm, its employees and consultants are not
responsible for the results of any actions taken on the basis of
information in this document, or for any error in or omission from
this document. Further, the Firm, its employees and consultants,
expressly disclaim all and any liability and responsibility to any
person who reads this document in respect of anything, and of
the consequences of anything, done or omitted to be done by
such person in reliance, whether wholly or partially, upon the
whole or any part of the content of this document. Without limiting
the generality of the above, no author, consultant or the Firm shall
have any responsibility for any act or omission of any other author,
consultant or the Firm. This update does not and is not intended to
constitute solicitation, invitation, advertisement or inducement of
any sort whatsoever from us or any of our members to solicit any
work, in any manner, whether directly or indirectly.
You can send us your comments at:
argusknowledgecentre@argus-p.com
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