Latest news with #ShaktikantaDas
Time of India
3 days ago
- Business
- Time of India
Changes to IBC Finalised After PMO Approval
The corporate affairs ministry has finalised amendments to the Insolvency and Bankruptcy Code (IBC), following approval by the Prime Minister's Office (PMO), people with knowledge of the matter said. This comes after months of deliberations and is aimed at expediting the resolution of bankrupt firms and bolstering recoveries by creditors. The proposed amendments include a framework for each of the three types of bankruptcy resolutions under the IBC—creditor-led resolution, cross-border insolvency and corporate group bankruptcy. These changes are the latest by the Centre since 2021 as it seeks to strengthen the code, said the people cited. Between its launch in May 2016 and 2021, the IBC had been amended six times to respond to emerging challenges in resolving bankrupt firms. The government had since then refrained from further tinkering to allow the bankruptcy ecosystem to take root. In a meeting on June 6 chaired by Shaktikanta Das, principal secretary to Prime Minister Narendra Modi, the changes were discussed in detail, one of the people told ET. Accordingly, the ministry will move a cabinet note shortly following approval by finance and corporate affairs minister Nirmala Sitharaman, aiming to introduce the amendments in the upcoming monsoon session of parliament starting July 21, they said. Das is former governor of the Reserve Bank of India. However, the amendments are unlikely to include any provision aimed at avoiding a repeat of the situation that arose after the Supreme Court, in May, scrapped JSW Steel's ₹19,700 crore acquisition of Bhushan Power and Steel four years ago, flagging violations of rules or processes. This is because the apex court had upheld the integrity and intent of the IBC and underscored the need to abide by prescribed legal processes on the part of all stakeholders, said the people cited. However, regulations could be changed to ensure IBC processes are followed in letter and spirit during acquisitions, they said. Changes in regulations won't require parliamentary approval. Creditor-led resolution: The creditor-led resolution framework will largely involve out-of-court arrangements. This will lower the workload of the National Company Law Tribunal (NCLT) by enabling the committee of creditors to take on greater responsibility and expedite stressed asset resolution , ET has reported. Cross-border insolvency: In a change of the earlier plan, the government now intends to introduce the cross-border insolvency framework under the IBC, the people said. This will be tailored around a model United Nations law and aim to ensure easier access for creditors to overseas assets of stressed companies. Such a framework would enable India to seek cooperation from foreign countries to bring defaulters' assets there under consideration for insolvency proceedings. Group insolvency: The ministry will also introduce the 'voluntary' group insolvency framework that will facilitate a joint resolution of stressed entities of a domestic corporate group, given the interconnected nature of their operations. ET had earlier reported that the framework could empower the committees of creditors of various bankrupt companies of a group to decide if they need to join hands to speed up resolution and maximise gains or pursue the processes separately. It will apply only to a group's bankrupt companies and won't extend to its solvent entities. Currently, resolutions of individual entities of a group are pursued separately by their respective creditors. A proper group insolvency framework was necessitated after the interconnected nature of group companies had delayed resolution in a few cases, such as those of Videocon, Era infrastructure, Lanco, Educomp, Amtek, Adel, Jaypee and Aircel.
Time of India
3 days ago
- Business
- Time of India
Changes to IBC finalised after months of talks, PMO approval
The corporate affairs ministry has finalised amendments to the Insolvency and Bankruptcy Code (IBC), following approval by the Prime Minister's Office (PMO), people with knowledge of the matter said. This comes after months of deliberations and is aimed at expediting the resolution of bankrupt firms and bolstering recoveries by creditors. The proposed amendments include a framework for each of the three types of bankruptcy resolutions under the IBC — creditor-led resolution , cross-border insolvency and corporate group bankruptcy. The new frameworks These changes are the latest by the Centre since 2021 as it seeks to strengthen the code, said the people cited. Between its launch in May 2016 and 2021, the IBC had been amended six times to respond to emerging challenges in resolving bankrupt firms. The government had since then refrained from further tinkering to allow the bankruptcy ecosystem to take root. In a meeting on June 6 chaired by Shaktikanta Das, principal secretary to Prime Minister Narendra Modi, the changes were discussed in detail, one of the people told ET . Accordingly, the ministry will move a cabinet note shortly following approval by finance and corporate affairs minister Nirmala Sitharaman, aiming to introduce the amendments in the upcoming monsoon session of parliament starting July 21, they said. Live Events Das is former governor of the Reserve Bank of India. However, the amendments are unlikely to include any provision aimed at avoiding a repeat of the situation that arose after the Supreme Court, in May, scrapped JSW Steel's ₹19,700 crore acquisition of Bhushan Power and Steel four years ago, flagging violations of rules or processes. This is because the apex court had upheld the integrity and intent of the IBC and underscored the need to abide by prescribed legal processes on the part of all stakeholders, said the people cited. However, regulations could be changed to ensure IBC processes are followed in letter and spirit during acquisitions, they said. Changes in regulations won't require parliamentary approval. Creditor-led resolution The creditor-led resolution framework will largely involve out-of-court arrangements. This will lower the workload of the National Company Law Tribunal (NCLT) by enabling the committee of creditors to take on greater responsibility and expedite stressed asset resolution , ET has reported. Cross-border insolvency In a change of the earlier plan, the government now intends to introduce the cross-border insolvency framework under the IBC, the people said. This will be tailored around a model United Nations law and aim to ensure easier access for creditors to overseas assets of stressed companies. Such a framework would enable India to seek cooperation from foreign countries to bring defaulters' assets there under consideration for insolvency proceedings. Group insolvency The ministry will also introduce the 'voluntary' group insolvency framework that will facilitate a joint resolution of stressed entities of a domestic corporate group, given the interconnected nature of their operations. ET had earlier reported that the framework could empower the committees of creditors of various bankrupt companies of a group to decide if they need to join hands to speed up resolution and maximise gains or pursue the processes separately. It will apply only to a group's bankrupt companies and won't extend to its solvent entities. Currently, resolutions of individual entities of a group are pursued separately by their respective creditors. A proper group insolvency framework was necessitated after the interconnected nature of group companies had delayed resolution in a few cases, such as those of Videocon, Era Infrastructure, Lanco, Educomp, Amtek, Adel, Jaypee and Aircel.
Time of India
20-06-2025
- Business
- Time of India
RBI eases norms for loans to projects like roads and ports
MUMBAI: RBI has eased regulations for project financing, which will make it less expensive for lenders to provide loans for infrastructure and industrial projects like roads, ports and power plants. The move acknowledges varying risk levels across sectors. The regulator has finalised its project finance guidelines, effective Oct 1, 2025, offering more flexible and sector-specific norms. Key changes include reduced general provisions for under-construction and operational projects. Penalties for project delays have also been eased. In the earlier draft, a delay beyond two years (infrastructure) or one year (non-infrastructure) attracted a 2.5% provision. Now, it's reduced to about 0.4% and 0.6% per quarter of delay, respectively. Projects financially closed before Oct 1, 2025, are exempt - unless there's a credit event or major loan restructuring. Instead of a flat 5% provision, commercial real estate (CRE) projects need 1.25% during construction and 1% when operational; CRE-residential housing requires 1% and 0.75%, while others need 1% and 0.4%. The definition of credit events is now clearer, excluding vague clauses like "NPV (net present value) diminution." by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Giao dịch CFD với công nghệ và tốc độ tốt hơn IC Markets Đăng ký Undo It focuses on tangible signs like default, DCCO (date of commencement of commercial operations) extension, or financial stress. RBI has also simplified delay categorisation: Infrastructure projects can defer DCCO by up to three years; non-infra, including CRE and CRE-residential housing, by two. Also, financial closure means 90% of funding is legally committed, with regulatory approvals tied to milestones instead of closure date - offering more realistic compliance. The overall framework is more practical, aiding developers and lenders alike. The earlier draft norms were announced by then RBI governor Shaktikanta Das. His successor, Sanjay Malhotra, had announced that the norms would not enforced in FY25. Commercial banks with substantial project finance portfolios would have faced a sharp rise in provisioning requirements, directly impacting their capital adequacy and profitability had RBI stuck to the earlier provisioning norms. Power Finance Corporation (PFC) and Rural Electrification Corporation (REC), which together hold more than Rs 16 lakh crore in project loans, were highlighted as among the most exposed to these draft norms Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
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Business Standard
13-06-2025
- Business
- Business Standard
Closer scrutiny of independent directors likely amid IndusInd Bank row
The role of independent directors (IDs) on the boards of private banks may come under closer scrutiny following the blowout at IndusInd Bank. While the Reserve Bank of India (RBI) does take bank board deliberations into its annual inspections, the stress on governance premium and the events at IndusInd Bank may intensify the gaze on IDs, said multiple banking sources on the condition of anonymity given the sensitivities involved. 'One of the most important skills needed for being an effective board member is the ability to see beyond the presentations and connect the dots without getting lost in siloed topics. This skill is hard to come by and can only manifest when quality time is devoted to the role. Such people are in demand across the system,' said R Gurumurthy, who serves as ID on the boards of Arka Fincap and Religare (he was the head of governance at RBL Bank). A source said that the vetting process of IDs may become more intense. The role of IDs and boards was articulated by the then RBI Governor Shaktikanta Das in meetings held with the boards of state-run and private banks two years ago. The meetings stressed on governance, the role of the boards and supervisory expectations. They were a follow-up to Union Finance Minister Nirmala Sitharaman's announcement in Budget FY24 on the need to improve the standards of governance and investor protection in banking. Sitharaman had said the government would amend the RBI Act, 1934, the Banking Regulation Act, 1949, and the Banking Companies (Acquisition and Transfer of Undertakings Act), 1970. Das had held, 'it is necessary that independent directors are truly independent; that is, independent not only of the management, but also of controlling shareholders while discharging their duties. They are to always remember that their loyalty is to the bank and no one else; and are expected to ask pertinent questions and obtain the required information from the management before making decisions.' But he had also qualified: 'I am not advocating any confrontation but only stressing the need for the required level of alertness among all directors.' The events at IndusInd Bank also bring the observations made in the P J Nayak Committee to review governance of boards of banks in India (May 2014) into relief. It had noted that 'as the non-executive chairman is not an ID, a lead ID could play a helpful role in each bank board, and would be chosen by the board's IDs. Such a spokesperson for the independent directors could be a useful counterpoint in the board to the chairman and the chief executive officer.' The report also touched upon the 'fit-and-proper' criterion for IDs. At a minimalist level, fit-and-proper is 'an exclusion criterion'. Potential directors convicted of fraud or incoming investors who have been subject to major criminal penalties can be argued not to be fit and proper. This minimalist interpretation signifies who should be excluded rather than included. It also stressed that bank boards need to aim higher as an inclusion category, seeking talented professionals on boards and reputed investment funds as shareholders, for the governance and reputation gains that these would bring the bank. Reputed investment funds ask demanding questions of bank managements, and are known to exit when answers are unsatisfactory. Talented directors similarly improve board governance. 'Fit-and-proper cannot be the criterion for such inclusion, and needs to move to a more demanding threshold.'
Time of India
07-06-2025
- Business
- Time of India
Panel may be set up for creating local 'Big Fours'
Live Events (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel The government may set up a panel under corporate affairs secretary Deepti Gaur Mukerjee to prepare a framework to build an "enabling ecosystem" to create large home-grown chartered accountancy (CA) firms comparable to the 'Big Four,' people familiar with the development said. The plan follows a meeting by the Prime Minister's Office (PMO) on Friday to deliberate on creating a system where CA firms would be encouraged to pursue expansion and growth, they meeting was chaired by Shaktikanta Das, principal secretary-2 to Prime Minister Narendra Modi , and attended by senior officials from the PMO and the corporate affairs ministry , among planned panel will likely suggest changes required to the extant policy and regulatory frameworks to enable small firms to scale up through both local and global tie-ups, the people said. It could also review impediments currently discouraging firms to grow in the Big Four-EY, Deloitte, KPMG, PwC-along with Grant Thornton and BDO dominate the Indian audit ecosystem "With policy support, regulatory momentum, and entrepreneurial drive, it is realistic that India could produce its own Big 4 in this decade itself," said Rakesh Nangia, founder & managing partner at Nangia & Co LLP."Indian firms must invest in quality, governance, and global presence, while regulators must enable visibility and innovation," added Dinesh Kanabar, chief executive at Dhruva Advisors.
