Skip to main content

Wilful defaulters cannot bid for their cos

Wilful defaulters cannot bid for their cos
State Bank of India (SBI) chairman Rajnish Kumar on Monday said that promoters of defaulting companies are within their rights to bid for their businesses which are on the block following insolvency proceedings. However, wilful defaulters or those borrowers who have diverted funds will not find any place in the bidding process, he said.
Kumar’s remarks come at a time when the insolvency process has come under criticism as it allows existing borrowers to bid for the companies at steep discounts. For instance, in the case of Innoventive Industries — one of the first cases in the National Company’s Law Tribunal under the new Insolvency and Bankruptcy Code — the best bids that the lenders have received requires them to take a haircut of 75% of their loan amount, resulting in a stalemate.
“Ethically, I don’t know, but legally they are within their rights to participate,” said Kumar, responding to queries on whether it was ethical to let a defaulter buy back a company at a discount. Kumar said that among the preconditions that banks will have for the bidding process is a requirement that they should not be classified as wilful defaulters. Second, the forensic audit should give them a clean chit and not hold them responsible for fund diversion and, finally, lenders have to find the resolution plan viable. Kumar was speaking on the sidelines of a banking summit jointly organised by FICCI and the Indian Banks Association.
The RBI has asked banks to initiate insolvency proce- edings against 41 companies. Banks have already started proceedings against 11 companies which include Essar Steel, Bhushan Steel, Bhusan Power, ABG Shipyard and Alok Industries. The Ruias of Essar Group have submitted an expression of interest (EoI) for Essar Steel. “If the law permits existing promoters to participate then we can’t help it. We have to abide by the law,” Kumar said.
Earlier, speaking at the summit, RBI deputy governor N S Vishwanathan said that digitisation can reduce the need for financial intermediation and one example of that is peer-to-peer lending. He added that banks and other traditional financial institutions will have to look at alternative business models. “In India, the environment is so conducive to digital adoption that one could say the country is in a very sweet spot in this area,” said Vishwanathan. 10,001-1lakh and Rs 15 for Rs 1-2 lakh. For NEFT transactions of over Rs 2 lakh, there was a fee of Rs 25.
However, any NEFT or RTGS transaction carried out at the bank branch will be payable. “The revision in NEFT/ RTGS online charges is applicable across all retail savings, salary and non-resident customers effective November 1, 2017,” HDFC Bank said in a notice to customers.
On chequebook issuance, HDFC Bank said a customer can avail one chequebook of 25 leaves free only once in a year in contrast to two such chequebooks. However, the cost of requesting an additional chequebook (25 leaves) has been kept unchanged at Rs 75 each.Also, if a cheque is returned due to insufficient funds, each such cheque will now attract a penalty of Rs 500 each.
The Business Standard, New Delhi, 08th November 2017

Comments

Popular posts from this blog

At 18%, GST Rate to be Less Taxing for Most Goods

About 70% of all goods and some consumer durables likely to cost less

A number of goods such as cosmetics, shaving creams, shampoo, toothpaste, soap, plastics, paints and some consumer durables could become cheaper under the proposed goods and services tax (GST) regime as most items are likely to be subject to the rate of 18% rather than the higher one of 28%.

India is likely to rely on the effective tax rate currently applicable on a commodity to get a fix on the GST slab, said a government official, allowing most goods to make it to the lower bracket.

For instance, if an item comes within the 12% excise slab but the effective tax is 8% due to abatement, then the latter will be considered for GST fitment.

Going by this formulation, about 70% of all goods could fall in the 18% bracket.

The GST Council has finalised a four-tier tax structure of 5%, 12%, 18% and 28% but has left room for the highest slab to be pegged at 40%. A committee of officials will work out the fitment and the council…

Coffee-Toffee, the GST Debate Continues

Hundreds of crores of rupees in the form of taxes ride on the exact categorisation of products Is Parachute hair oil or edible oil? Is KitKat a chocolate or a biscuit? Is a Vicks tablet medicament or confectionery? For the taxpayer and the tax collector, this is much more than an exercise in semantics -hundreds of crores of rupees ride on the exact categorisation.
As the government moves closer to rolling out the goods and services tax (GST) on July 1, many such distinctions are being debated so that no ambiguity remains. Not just that, the government is revisiting old tax cases that were lost over product categorisation, according to people with knowledge of the matter, presumably with a view to making sure that revenue collections can be maximised. “In the past, several tax officers had challenged some of the product categorisations, including those in the retail segment, but lost out in court or at appellate level,“ said one of the persons. “Now we have a chance to go ahead with speci…

Deposit gush:-CA Institute Bats for Special Audit