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Open in new tab Guidelines on Settlement of Dues of borrowers by ARC
– Team Finserv (finserv@vinodkothari.com)
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FAQs on Co-lending
Team Finserv l finserv@vinodkothari.com
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IT Governance: Upgrade needed by April 01, 2024
Workshop on RBI Circular on Regulatory Measures on Consumer Credit by Banks & NBFCs
Unlocking Working Capital: An Overview of Supply Chain Finance
-Dayita Kanodia, Executive | finserv@vinodkothari.com
The best way to reduce your supply chain inventory is to sell it.” Dilbert.
Background
A supply chain is a complex network of organizations, people, activities, information, and resources involved in the creation and distribution of a product or service from its initial sourcing of raw materials to the delivery of the final product to the end customer. The supply chain of a business can vary significantly depending on the industry, size of the company, and the specific products or services it offers.
Financing the supply chain is a critical aspect of supply chain management and is essential for ensuring the smooth flow of goods and services.
This article discusses the model of supply chain finance and how it helps in improving the health of the supply chain.
Read more →Security Interest: Meaning, forms, registration, enforcement, and effects of non-registration
-Team Vinod Kothari and Company | resolution@vinodkothari.com
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RBI Framework for Green Deposits
– Team Finserv | finserv@vinodkothari.com
Climate change is clearly one of the most pertinent regulatory themes in recent times, as the move to sustainable business practices and energy efficient technologies need massive funding. The availability of finance for move to sustainability has an important role to play in mitigating climate change. To this effect, RBI also conducted a survey in January 2022 to assess the status of climate risk and sustainable finance in leading scheduled commercial banks, and observed a need for concerted effort and further action in this regard. Following the same, RBI conducted a discussion, and released a press release indicating its intention to release a framework for acceptance of green deposits in India. On 11th April, 2023, RBI released the Framework for Acceptance of Green Deposits (“Framework”) for banks and deposit-taking NBFCs/HFCs, to be applicable from 1st June, 2023.
| Our video lecture on the topic is available here: https://youtu.be/7rRhVYR-zT0 |
As the green deposits formally mark its presence in the Indian financial markets, one may be inquisitive on various aspects related to it. We have tried to analyze and put our views on the same in this write-up.
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Private sector banks to continuously monitor major shareholders
RBI Directions, 2023 require banks to have a mechanism to detect violation w.r.t. RBI prior approval and ‘fit and proper’ status
– Vinita Nair, Senior Partner | corplaw@vinodkothari.com
Given their systemic significance, ensuring that ownership of banks neither gets concentrated, nor falls into wrong hands, has always been important. Therefore, acquisition of shares or voting rights (‘S/VR’) is strictly regulated by Section 12B of Banking Regulation Act, 1949 (‘BR Act’), supplemented by RBI Directions issued from time to time. In the case of public sector banks, there is a ceiling of 10% of the total voting rights for shareholders other than the Central Government.
Section 12B of BR Act prescribes the requirement of prior approval of RBI in case of a person intending to become a “major shareholder”, that is, a holder with 5% of the S/VR in a banking company. The requirement is applicable where a person acquires or agrees to acquire S/VR, which could be (a) either directly or indirectly, and (b) whether alone, or by acting in concert with any other person. Hence, there is a need to do both horizontal aggregation [that is, relatives[1] and persons acting in concert (PAC)[2]], as well as vertical aggregation (that is, indirect acquisition through controlled entities or “associated enterprises[3]”.
This article discusses the possible pain points likely to be faced by the banks, other requirements under the new regime and actionable arising therefrom.
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