Skip to main content

Updated Insolvency Code may cover rebidding cases too

By
Updated Insolvency Code may cover rebidding cases too 
Amendments to the Insolvency and Bankruptcy Code, which are proposed to be prospective and relevant only to fresh cases, will also apply in instances of rebidding once the changes take effect. 
“If the character of the bid has changed, then it is a new bid and the new rules will apply,” Injeti Srinivas, secretary in the Ministry of Corporate Affairs, said on Wednesday. The government has no intention of interfering in ongoing cases being scrutinised by committees of creditors, Srinivas said at the venue of a conference on insolvency law organised by the Confederation of Indian Industry.
“We have to respond to the emerging challenges. The ultimate objective is to rescue the company while maintaining the sanctity of the framework,” he added. Srinivas said the government is considering increasing the minimum benchmark for individual insolvency to Rs 10,000 from Rs 1,000. “The number of cases can become enormous since even a crop loan would qualify as individual insolvency,” he said. The government is yet to notify the rules for individual insolvency. 
The 14-member insolvency law committee headed by Srinivas has made public its recommendations for amendments to the IBC. The ministry has sent the draft bill of amendments to the law ministry. On whether the government will promulgate an ordinance to introduce the changes, Srinivas said, “The call for ordinance will have to be taken by the competent body. The government will have to take a call on how many of these are necessary.” 
The MCA secretary said the big 12 cases referred by the Reserve Bank of India for insolvency have proceeded well. He said there had been a fear that bid values would go down once a promoter was barred, but that has not been the case. “The 270-day deadline has not been breached. Many cases have come to successful fruition,” he said. Of the total Rs 9 lakh crore worth of bad loans, almost Rs 4 lakh crore has come back into the system. 
To step up the disposal of cases, the government will double the strength of the National Company Law Tribunal. During the past one and a half years, NCLT has disposed of 16,000 cases. 
The Economic Times, New Delhi, 05th March 2018

Comments

Post a Comment

Popular posts from this blog

RBI deputy governor cautions fintech platform lenders on privacy concerns during loan recovery

By
  India's digital lending infrastructure has made the loan sanctioning system online. Yet, loan recovery still needs a “feet on the street” approach, Swaminathan J, deputy governor of the Reserve Bank of India, said at a media event on Tuesday, September 2, according to news agency ANI.According to the ANI report, the deputy governor flagged that fintech operators in the digital lending segment are giving out loans to customers with poor credit profiles and later using aggressive recovery tactics.“While loan sanctioning and disbursement have become increasingly digital, effective collection and recovery still require a 'feet on the street' and empathetic approach. Many fintech platforms operate on a business model that involves extending small-value loans to customers often with poor credit profiles,” Swaminathan J said.   Fintech platforms' business models The central bank deputy governor highlighted that many fintech platforms' business models involve providing sm
Post a Comment
Read more

Credit card spending growth declines on RBI gaze, stress build-up

By
  Credit card spends have further slowed down to 16.6 per cent in the current financial year (FY25), following the Reserve Bank of India’s tightening of unsecured lending norms and rising delinquencies, and increased stress in the portfolio.Typically, during the festival season (September–December), credit card spends peak as several credit card-issuing banks offer discounts and cashbacks on e-commerce and other platforms. This is a reversal of trend in the past three financial years stretching to FY21 due to RBI’s restrictions.In the previous financial year (FY24), credit card spends rose by 27.8 per cent, but were low compared to FY23 which surged by 47.5 per cent. In FY22, the spending increased 54.1 per cent, according to data compiled by Macquarie Research.ICICI Bank recorded 4.4 per cent gross credit losses in its FY24 credit card portfolio as against 3.2 per cent year-on-year. SBI Cards’ credit losses in the segment stood at 7.4 per cent in FY24 and 6.2 per cent in FY23, the rep
Post a Comment
Read more

India can't rely on wealthy to drive growth: Ex-RBI Dy Guv Viral Acharya

By
  India can’t rely on wealthy individuals to drive growth and expect the overall economy to improve, Viral Acharya, former deputy governor of the Reserve Bank of India (RBI) said on Monday.Acharya, who is the C V Starr Professor of Economics in the Department of Finance at New York University’s Stern School of Business (NYU-Stern), said after the Covid-19 pandemic, rural consumption and investments have weakened.We can’t be pumping our growth through the rich and expect that the economy as a whole will do better,” he said while speaking at an event organised by Elara Capital here.f there has to be a trickle-down, it should have actually happened by now,” Acharya said, adding that when the rich keep getting wealthier and wealthier, they have a savings problem.   “The bank account keeps getting bigger, hence they look for financial assets to invest in. India is closed, so our money can't go outside India that easily. So, it has to chase the limited financial assets in the country and
Post a Comment
Read more