Impact of GST on factoring transactions

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By Abhirup Ghosh, (gst@vinodkothari.com)

Factoring is a very popular product mode of working capital funding across the globe. In India, however, the picture is not quite rosy for factoring companies. Nevertheless, like every other thing in the country, factoring transactions will also be affected by the introduction of GST in India. Here in this article, we intend to walk you through the probable impact, GST would create on factoring transactions. Read more →

SARFAESI Rulings

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

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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?

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Increased Capital Requirements for Asset Reconstruction Companies (ARCs) by Kirti Sharma, April 8, 2017

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RBI Announcement

With a view to increase more cash based sales of Non-Performing Assets (NPAs), the Reserve Bank of India (RBI) has amended the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 increasing the capital requirement for Asset Reconstruction Companies (ARCs) to 100 crores from 2 crores in the Statement on Developmental and Regulatory Policies issued on 6th April 2017.

Implications

This move of the regulator would raise concern for the smaller ARCs operating in the country to comply with the steep rise in the capital requirement norms.

The final guidelines in this regard shall be issued by the end of April 2017.