The Cabinet is likely to approve relevant changes to the three-year-old Insolvency and Bankruptcy Code at the earliest. This will bring much-needed confidence to buyers of distressed assets, acquirers who were otherwise wary about the over-reach of the investigative authorities. Amendments to the IBC, which came into effect in December 2016, will require eventual parliamentary approval.
Worries stem from BPSL case, where ED attached assets of the company after it was taken over by JSW Steel.
Liquidity remains a worry for the NBFC sector; loan sanctions fall 34% in September quarter.
Lenders are reluctant to give fresh loans to the company hit by allegations of corporate governance violations and fraud. They are nervous about the way the cash flows are managed and want to monitor the daily expenses, and hence all expenditures will be approved through Belgium-headquartered auditing firm BDO.
The collapse of IL&FS froze the credit markets and the contagion spread.
For financial firms the appearance of stability is important as customer behaviour could change quickly.
Bawa had also allegedly transferred nearly Rs 1.14 crore from his account despite a court order restraining him and capping his withdrawals at Rs 2 lakh per month.
The central bank’s June 7 circular requires banks to put in place ICAs within a month of the review period.
India’s insolvency resolution framework has truly arrived after a tortuous journey of three years. Banks will finally be able to keep out unscrupulous promoters with the law establishing the primacy of financial lenders on asset proceeds.
These companies together hold a lot of cross-business opportunities for CSB.
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