Despite recent improvements in India’s economic stability, the hangover from India’s credit fueled boom isn’t over yet. Estimates of the percentage of bank loans that are “impaired” — where repayment of the loan is classified as doubtful — run as high as 9%. Following the global financial crisis in 2008 and 2009, India joined countries around the world in rapidly pumping money into the financial system to prevent a prolonged global recession. The strategy of cheaper and more available money, much of it flowing through India’s banks, succeeded and resulted in the country’s growth. However, overreliance on interest-rate sensitive bank loans, slowing global GDP growth rates, and uncertain domestic economic policies exposed the vulnerabilities of India’s banks. Bad debts and missed loan repayments started to pile up quickly. The consequences of shortcomings in the insolvency process are … [Read more...] about Revamping India’s Bankruptcy Laws: A Way Out of India’s Bad Debt Problem
Dealing with bad debts
Introdution The Debts Recovery Tribunal has been constituted under Section 3 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. The original aim of the Debts Recovery Tribunal was to receive claim applications from Banks and Financial Institutions against their defaulting borrowers. To aid the procedure thereof, the Debts Recovery Tribunal (Procedure) Rules 1993 were also drafted.While initially the Debts Recovery Tribunals did perform well and helped the Banks and Financial Institutions recover substantially large parts of their non performing assets, or their bad debts as they are commonly known, but their progress was stunted when it came to large and powerful borrowers. These borrowers were able to stall the progress in the Debts Recovery Tribunals on various grounds, primarily on the ground that their claims against the lenders were pending in the civil courts, and if the Debts Recovery Tribunal were adjudicate the matter and auction off their … [Read more...] about Debt Recovery Tribunal: A Non-Performing Asset
Share Tweet Plus One Pin It Email Print By: P.V Dinesh December 19, 2018 3:24 pm Change Font Size Recently, on 26th November 2018, the Corporate Affairs Secretary Mr.Injeti Srinivas informed the country that out of the 9,000 cases filed before the National Company Law Tribunal (NCLT), 4,400 cases have been disposed of, leading to a recovery of approximately Rs.71,000 crores. The total bad debts assessed so far that is owed to the public sector banks in India amounts to Ten Lakh Crores of Rupees. As per the report published by the Insolvency and Bankruptcy Board of India(“IBBI”),in respect of the 32 companies which are stated to have been resolved in insolvency resolution process under the Insolvency and Bankruptcy Code, 2016 (“IBC”), there is a recovery of Rs.49,783 crores which amounts to 56 % recovery. The balance, i.e., Rs.39,619 crores is written off, which would otherwise have been payable by these 32 companies. In the case of the 136 … [Read more...] about Insolvency Proceedings – Safe Passage for Defaulters?
President Donald Trump hasn’t decided if he’ll support the bipartisan congressional agreement on border security that’s contingent on him accepting less wall construction money than he’s been demanding as a way to avert another government shutdown, an administration official said. The White House is waiting to review the full language of the deal, the official Tuesday. The tentative pact reached Monday night provides $1.375 billion for 55 new miles of border fencing in Texas’s Rio Grande Valley area, according to congressional aides who spoke on condition of anonymity. That’s far short of the $5.7 billion Trump wants for a wall. But the agreement also rejects limits Democrats sought on detentions of immigrants apprehended in the U.S. It still has to be written into legislation, pass both chambers of Congress and get Trump’s approval before Friday night to avoid a partial government shutdown. The agreement was announced less than an hour before … [Read more...] about Trump Undecided on Tentative Border Deal in Congress
Donald Trump hits just keep coming from The New York Times. Wednesday’s cover article was a deep dive into an apparent sweet deal that then New Jersey Governor Chris Christie gave to Trump on his mounting casino tax debt that was plaguing his business. The article goes on to speculate if Trump was given “special treatment” because of his close relationship with the New Jersey Governor. From 2002 through 2006, as Trump’s casinos in New Jersey struggled financially, Trump also faced a mounting unpaid tax bill that the business claimed they couldn’t afford. That suddenly changed in 2011 when Chris Christie took officer. The article states:The total (Tax bill), with interest, had grown to almost $30 million. The state had doggedly pursued the matter through two of the casinos’ bankruptcy cases and even accused the company led by Mr. Trump of filing false reports with state casino regulators about … [Read more...] about Report: Gov. Christie’s State Gave Trump Sweet Deal to Ease His $30 Million Casino Tax Debt