Latest news with #SwatantraBhatia
Economic Times
3 days ago
- Business
- Economic Times
Banks seek RBI nod to tap litigation funding for overseas dues recovery
New Delhi: Some banks have reached out to the Reserve Bank of India seeking permission to engage third-party litigation funds for recovery of their dues from overseas entities. Litigation funding is a globally accepted model through which a third party, unrelated to the litigants, provides financial support for legal proceedings in exchange for a share of the recovered amount if the case succeeds. Lenders made a representation on this to the RBI last month. There is currently no provision in Indian laws that allows banks recourse to litigation funding to recover dues, said people familiar with the development. "Banks currently use their resources, like hiring a legal firm, and other related expenses for recoveries," said a bank executive. "Globally, there are firms that specialise in such cases, and often the recoveries at initial stages are better than offloading it later to an asset recovery firm at a deep discount." Bankers have suggested that this model can be exclusively used for pursuing recoveries of their foreign exposure and will not need any legislative changes. The RBI can permit this model under the asset recovery framework, they said. An email sent to the RBI did not receive any response. Independent experts support the idea. 'These specialist funders carefully vet cases and bring in a worldwide network of lawyers and asset-recovery experts, helping banks enforce judgements more quickly and press debtors to settle on better terms,' said Swatantra Bhatia, partner, accounting and outsourcing services, Forvis Mazars. Burford Capital's $100 million joint fund with the IFC to buy and litigate Middle East and North Africa (MENA) non-performing assets has been a success, he pointed out. According to Vivek Iyer, partner and financial services risk leader, Grant Thornton Bharat, Singapore has a successful framework on litigation funding, making it an attractive global financial market. Benchmarking their practices may be a good step for India, given the larger global aspirations of the Indian economy, he said. However, the RBI may have some concerns, he added.
Time of India
3 days ago
- Business
- Time of India
Banks seek RBI nod to tap litigation funding for overseas dues recovery
New Delhi: Some banks have reached out to the Reserve Bank of India seeking permission to engage third-party litigation funds for recovery of their dues from overseas entities. Litigation funding is a globally accepted model through which a third party, unrelated to the litigants, provides financial support for legal proceedings in exchange for a share of the recovered amount if the case succeeds. Explore courses from Top Institutes in Please select course: Select a Course Category Project Management Data Science Digital Marketing Public Policy CXO Operations Management Others Data Science PGDM Design Thinking Leadership others Product Management healthcare Artificial Intelligence Finance Technology Management MBA Degree Cybersecurity Healthcare MCA Data Analytics Skills you'll gain: Portfolio Management Project Planning & Risk Analysis Strategic Project/Portfolio Selection Adaptive & Agile Project Management Duration: 6 Months IIT Delhi Certificate Programme in Project Management Starts on May 30, 2024 Get Details Skills you'll gain: Project Planning & Governance Agile Software Development Practices Project Management Tools & Software Techniques Scrum Framework Duration: 12 Weeks Indian School of Business Certificate Programme in IT Project Management Starts on Jun 20, 2024 Get Details Lenders made a representation on this to the RBI last month. There is currently no provision in Indian laws that allows banks recourse to litigation funding to recover dues, said people familiar with the development. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Official IQ Test: What is Your IQ? | Answer 30 Questions to Find Out IQ International Undo "Banks currently use their resources, like hiring a legal firm, and other related expenses for recoveries," said a bank executive. "Globally, there are firms that specialise in such cases, and often the recoveries at initial stages are better than offloading it later to an asset recovery firm at a deep discount." Live Events May not need legislative changes Bankers have suggested that this model can be exclusively used for pursuing recoveries of their foreign exposure and will not need any legislative changes. The RBI can permit this model under the asset recovery framework , they said. An email sent to the RBI did not receive any response. Independent experts support the idea. 'These specialist funders carefully vet cases and bring in a worldwide network of lawyers and asset-recovery experts, helping banks enforce judgements more quickly and press debtors to settle on better terms,' said Swatantra Bhatia, partner, accounting and outsourcing services, Forvis Mazars . Burford Capital's $100 million joint fund with the IFC to buy and litigate Middle East and North Africa (MENA) non-performing assets has been a success, he pointed out. According to Vivek Iyer, partner and financial services risk leader, Grant Thornton Bharat, Singapore has a successful framework on litigation funding, making it an attractive global financial market . Benchmarking their practices may be a good step for India, given the larger global aspirations of the Indian economy, he said. However, the RBI may have some concerns, he added.
