Posts

Digital lending Balloon: Navigating the path to growth

-Dayita Kanodia, Executive finserv@vinodkothari.com

“Ignoring technological change in a financial system based upon technology is like a mouse starving to death because someone moved their cheese.” – Chris Skinner[1]

Unprecedented growth of the sector

From pawnbrokers lending money in exchange for collateral to the use of sophisticated technologies to carry out credit underwriting, the landscape of lending business has evolved significantly in the last century. Today, it is hard to find a financial institution which is carrying on business without digitising any aspect of its lending process. With rapid advancements in cloud computing, artificial intelligence, and blockchain, as well as faster and more affordable internet connectivity, it is safe to say that the brick and mortar model for lending business will soon be a matter of the past.

The Global Digital Lending Market is valued at USD 11.33 Billion in the year 2022 and is anticipated to reach a value of USD 30.77 Billion by the year 2030. [2]

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AT1 Bonds: Death before it is due?

– Abhirup Ghosh | abhirup@vinodkothari.com

Additional Tier 1 bonds which are known by many names – AT1 bonds or Contingently Convertible Bonds (CoCo Bonds) or Perpetual Bonds, are capital structure instruments. Every liability instrument in corporate finance is essentially a capital structure instrument, that is, it is somewhere in the order of priority for its loss absorbency feature, but some of the instruments are high in the order of priorities, and therefore, their placing in the capital structure is commonly not a matter of concern. However, AT1 bonds are placed just after common equity, and therefore, if equity has suffered a meltdown, AT1 bonds will be next to be hit.

This article examines the life and death of AT1 bonds.

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Workshop on Effective Regulatory interface: Preparing for and handling RBI’s NBFC inspections

Registeration for the workshop have been closed. You may register your interest for a repeat workshop here here: https://forms.gle/RmwXa13DjuLBqhMU9

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