RBI cracks whip on Joint Lenders’ Forum, by Abhirup Ghosh

/0 Comments/in /by

Background

The Reserve Bank of India, on 5th March, 2017, came out with a notification[1] (Notification) to tweak the norms for constitution and operation of Joint Lender’s Forum (JLF) which was originally introduced in February, 2014.

To do recap, the original framework requires formation of joint lenders’ forum upon an account becoming SMA-2 to devise a corrective action plan (CAP) to revive it. Under the CAP, the lenders have three options – first, rectification of the account without changing any terms of the financial arrangement, second, restructuring of the account which involves change in the terms and conditions of the financial arrangement and lastly, if the other two fails, then the lenders may decide to initiate recovery proceedings against the borrower. Read more →

Is the two-section ordinance key to India’s bulging NPA crisis?

/0 Comments/in , , , /by
By Vinod Kothari, (vinod@vinodkothari.com)
The much-awaited ordinance, expected to make a tangible impact on India’s crisis of piling non-performing assets (NPA), was signed into law by the President on 5 May 2017. The Ordinance, consisting of barely two sections, makes amendments to the regulatory framework of banking in India, the Banking Regulation Act. After reading the law, one is forced to ask if this is what was holding up the resolution of NPA crisis in the country. Did it actually have to take all this time?

Read more →

FAQs on section 269ST of the Income-tax Act, Kanishka Jain

/7 Comments/in /by

Amid the brunt of the De-monetization, which was relatively fresh in the minds of the common people, Budget 2017 spelt out a loud message. The message was very clear; the government wanted the economy to be digitally equipped with no or very less cash transaction. While it seems impossible for the government to have an absolute cash free economy, but the tremors of the change can be felt. Read more →

Decoding RBI’s clarification on disbursal of loan in cash

/3 Comments/in /by

RBI vide Circular no DNBR (PD) CC.No.086/03.10.001/2016-17 (Notification), in a bid to align the extant directions with the provisions of Section 269SS and 269T of the Income Tax Act, 1961 has issued Notification which states the following:

  1. The present Directions require high value gold loans of Rs. 1 lakh and above to be disbursed by cheque only.
  2. To align with the requirements of Income Tax Act, 1961, Section 269SS and 269T of the Income Tax Act, 1961, as amended from time to time, would be applicable to all NBFCs with immediate effect.

Read more →