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insolvency

NBFCs brought under purview of insolvency code

By Anisha Shroff and Sharanya Kundu, Samvad Partners
With the introduction of a codified law on insolvency and bankruptcy processes, restructuring jurisprudence entered a new era. While the new law focused on rehabilitating and restructuring stressed companies, restructuring processes involving financial service...
DIPP unveils revised FDI policy

Harmonization of NBFC categories

The Reserve Bank of India (RBI) issued a notification on 15 February 2019 merging asset finance companies, loan companies, and investment companies into a new category called non-banking finance company - investment and credit...
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Jury out on partial credit enhancements for NBFCs

By Sawant Singh and Aditya Bhargava, Phoenix Legal
To reduce the burden on banks for financing infrastructure projects, and to promote the use of the corporate bond market for this purpose, the Reserve Bank of India (RBI) permitted banks to provide partial...

Regulation of outsourcing finally extended to NBFCs

By Shruti Rajan and Rutu Gandhi, Cyril Amarchand Mangaldas
Outsourcing has become increasingly complex. The world over, laws and regulatory frameworks have been put in place to permit execution and management to take place outside, while ensuring that the key risks and responsibilities...

RBI permits NBFCS to refinance infrastructure, project loans

The Reserve Bank of India, through a circular dated 2 June, has permitted non-banking financial companies (NBFCs) to refinance infrastructure and other project loans by way of take-out financing without a predetermined agreement with...

NBFCs to enjoy SARFAESI protection

The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI), provides certain measures for recovery of non-performing assets to “financial institutions” as defined under section 2(1)(m) of SARFAESI. The...

Documentation expected to reflect new NBFC rules

By Bhumika Tripathi, Khaitan Sud & Partners
The Indian banking sector has witnessed a paradigm shift in the past decade. Non-banking financial companies (NBFCs) have played a pivotal role in providing an array of financial services and innovative products, and have...

Rule changes for NBFCs: An unwelcome intrusion?

By Sawant Singh, Kartikeya Singh and Aditya Bhargava, Phoenix Legal
The global financial crisis sharply brought into light the role of non-banking financial companies (NBFCs) and the relative ease for “shadow banking” entities in India to conduct the business of lending. For instance, unlike...

Regulatory framework for NBFCs revised

The Reserve Bank of India issued a new set of norms for non-banking financial companies (NBFCs) through a circular dated 10 November. The changes, which aim to increase transparency and improve compliance, come three years...

Shares held by non-residents can be pledged to NBFC

The Reserve Bank of India, through a circular dated 6 June, has relaxed provisions relating to the pledge of equity shares (listed on a recognized stock exchange in India) held by non-resident shareholders in...

RBI approval mandatory before acquiring NBFC

Following a notification on 26 May, it is now mandatory for companies to obtain prior approval from the Reserve Bank of India (RBI) for any acquisition or transfer of control in any non-banking financial...

RBI restricts issue of debt securities by NBFCs

The Reserve Bank of India (RBI), through a circular dated 27 June and a clarification on 2 July, has imposed certain restrictions on the issue of debt securities by non-banking financial companies (NBFCs). The...

Rules for NBFC microfinance companies change

The Reserve Bank of India (RBI) created a new category of non-banking financial company (NBFC) known as non-banking financial company-micro finance institution (NBFC-MFI) through a circular on 2 December 2011 (circular 1). After receiving...

Warburg seizes stake in NBFC

India’s Future Group announced that it will divest its 53.67% stake in Future Capital Holdings to Warburg Pincus, a private equity firm. Future Group operates some of India’s major retail chains through its flagship operation,...

NBFCs: Can banks still benefit from regulatory arbitrage?

By Sonali Sharma and Suprio Bose, Juris Corp
Until recently, non-banking financial companies (NBFCs) were less-stringently regulated than banks by the Reserve Bank of India (RBI), and were thus considered an arbitrage boon in disguise by the financial services sector. NBFCs became...
Devyani Dhawan,Aditya Vikram Dua,SNG & Partners,Ordinary course Banking & finance restructuring

Ordinary course of business is not guaranteed

By Devyani Dhawan and Aditya Vikram Dua, SNG & Partners
Section 185 of the Companies Act, 2013 (act), governs transactions involving loans or the provision of guarantees or securities to companies in which a director is interested. Certain loans and guarantee or security transactions...
India Atma Nirbhar Bharat Scheme micro, small and medium enterprises

Lifeline for MSMES dragged down by pandemic

The pandemic and ensuing economic crisis have disproportionately impacted micro, small and medium enterprises (MSMEs). A large number of them face dire operational and financial constraints including a shortage of working capital, difficulty in...
Sawant Singh and Aditya Bhargava are partners at Phoenix Legal. Sristi Yadav, an associate

Much needed alignment for housing finance companies

By Sawant Singh and Aditya Bhargava, Phoenix Legal
Housing finance companies (HFCs) have traditionally occupied a staid corner of the financial sector, providing loans to homeowners and for the development of the housing industry. As a sector, housing finance has also been...

Analysing financing models for infrastructure projects

By Sharmil Bhushan and Jyoti Punjabi, HSA Advocates
The infrastructure sector is critical to India’s development. Financing in infrastructure is expected to grow exponentially over the next few years, particularly as India needs to spend about US$1.4 trillion on infrastructure if it...
relief

Slowing the free fall

Taking stock of the relief measures deployed by regulators to soften the impact of the lockdown. Gautam Kagalwala reports With the COVID-19 outbreak, the government has been fighting on two fronts. It has introduced a...