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The Reserve Bank of India (RBI) will, for the time being, leave it to individual banks to decide how best to deal with corporate loan defaulters, and the  government will exercise its majority shareholder rights to nudge staterun banks to take insolvent companies to bankruptcy courts, a government official  said on Wednesday.  The official’s statement came after the Supreme Court on Tuesday quashed a central bank circular instructing lenders to take defaulters to bankruptcy  resolution after 180 days of the default. The government’s approach in the wake of the apex court ruling is to use its ownership rights to ensure that  defaulters are firmly dealt with under the bankruptcy code. The central bank will examine the implications of the Supreme Court decision and come up with a considered response, which may take some time. “These things take time. The RBI may not immediately come up with specific guidelines or comments regarding restructuring of loans,” said...

India and US will be signing an information-sharing agreement before the end of the fiscal year. Companies headquartered in the US but having operations and  taxability in India now need not file country-by-country (CbC) reports in India, according to a pact signed between India’s tax department and the US  authorities.  In a press release, the Central Board of Direct Taxes (CBDT) has clarified that for such international companies, filing CbC reports in the US would be  sufficient.  These would then be shared with the Indian tax authority, the CBDT, under an information-sharing agreement which will be signed between the countries before  the end of the fiscal year. This will reduce the compliance burden on firms. The deadline for furnishing the CbC report was earlier extended. The Business Standard, 4th April 2019

Lenders also have the option of restructuring the loans Lenders to companies which are under stress could now have three options to deal with them if they  default on loans: take a haircut as part of a one-time settlement, restructure the loans for a longer tenure as they did when corporate debt restructuring  schemes were allowed, or go to the Insolvency and Bankruptcy Code (IBC) for redress.  These changes in the options available to lenders come, according to PE funds and bank lawyers who are involved in the IBC process, in the wake of the  Supreme Court on Tuesday setting aside the 12 February RBI circular, which allowed a 180-day window to banks to resolve a company default. But they can still find a resolution. According to a Reserve Bank of India circular, a loan becomes a non-performing asset when banks cannot find a way of  recovering their money in 90 days. In short, banks still have a window to resolve the default. Lenders can take a haircut as pa...