New loan restructuring policy offers more clarity to borrowers
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The Reserve Bank of India’s (RBI’s) new policy on the restructuring of loans nudges lenders and card issuers to be more transparent and fixes timelines within which financial institutions should act.
During the latest monetary policy, the RBI announced the Resolution Framework 2.0, which allows lenders to restructure loans of individuals and small businesses.
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“Similar to Resolution Framework 1.0, the new regulations give the power to lenders to accept or reject restructuring applications. Borrowers still have no say in the process. The decision will be based on the board-approved policy of each institution, said Adhil Shetty, CEO, Bankbazaar.com.
Govt wants lenders to step up focus on Mudra loans
Last year in June, the government announced the interest subvention under the Atmanirbhar Bharat Abhiyan.
Synopsis
“We are also considering extending the interest subvention of 2% on prompt repayment of Shishu loans sanctioned under the Pradhan Mantri Mudra Yojana (PMMY),” said a government official. The scheme ends this month.
The government wants lenders to focus on Mudra loans, as it expects that small borrowers will help pick up credit demand once the lockdowns in states are eased.
“We are also considering extending the interest subvention of 2% on prompt repayment of Shishu loans sanctioned under the Pradhan Mantri Mudra Yojana (PMMY),” said a government official. The scheme ends this month.
Letters to the editor dated May 24, 2021
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Upholding creditors’ rights
This refers to the editorial ‘Welcome clarification’. The apex court judgment upholding creditors’ right to to proceed against personal guarantors to a corporate borrower helps lift the uncertainty of banks and other financial creditors to pursue not only the corporate borrower but also individuals who stood as personal guarantors to enable the flow of credit to the company.
Banks now stand a real chance to recover substantially more from the resolution of a stressed corporate entity and from affluent personal guarantors for loans extended to the company by them. This ruling curbs rash borrowings by companies using guarantees given by promoters.
Jaypee Infratech lenders to meet on Monday
May 23, 2021
NBCC challenged a decision by the CoC to consider only the bid submitted by Suraksha Group to acquire Jaypee’s stressed assets
NBCC challenged a decision by the CoC to consider only the bid submitted by Suraksha Group to acquire Jaypee’s stressed assets×
NBCC wrote to the company’s debt resolution professional Anuj Jain, questioning his jurisdiction and also sent clarification on the queries raised by the lenders
Jaypee Infratech’s lenders will meet on Monday to decide the future course of action on the submission made by state-owned NBCC. This comes after NBCC challenged a decision by the Committee of Creditors to consider only the bid submitted by Suraksha Group to acquire Jaypee’s stressed assets.