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Pranjita Barman

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Partner in the General Corporate Practice at the Mumbai office of Cyril Amarchand Mangaldas. Pranjita advises on mergers & acquisitions and private equity investments and specializes in the financial services sector. She can be reached at pranjita.barman@cyrilshroff.com

SEBI’s Mutual Funds Lite Framework: A Regulatory Inflection Point For Passive Funds In India

Introduction

The capital markets regulator, Securities and Exchange Board of India (“SEBI”), released a consultation paper in July 2024 (“Consultation Paper”), seeking public comments on the much awaited liberalised mutual funds (“MF”) framework, designed specifically to govern and streamline operations for passive funds like index funds and exchange-traded funds (“ETFs”) (the “MF Lite Framework”.)[1]Continue Reading SEBI’s Mutual Funds Lite Framework: A Regulatory Inflection Point For Passive Funds In India

Is the NCLT’s approach in the Philips India case too literal?

Introduction

The Kolkata Bench of the National Company Law Tribunal (“NCLT”), on September 19, 2024, dismissed an application filed under Section 66 of the Companies Act, 2013 (“Companies Act”), in Philips India Limited[1] (the “Order”), on the grounds that Section 66 of the Companies Act cannot be invoked for capital reduction when the circumstances mentioned in Section 66(a) or 66(b) of the Companies Act are not met. The NCLT held that Section 66, which provides for reduction of share capital, cannot be used merely to provide liquidity or exit to minority shareholders, or to save on administrative costs. The Order attempts to justify the same on the grounds that the proposed share capital reduction was only incidental to the main objective of buy-back of shares.[2] However, this observation is in stark contrast to a catena of NCLT and National Company Law Appellate Tribunal (“NCLAT”) orders, as well as decisions of various High Courts that have time and again noted that a company may reduce its share capital in any manner as it deems fit, and courts have limited role in such schemes of capital reduction.Continue Reading Is the NCLT’s approach in the Philips India case too literal?

Acquisition of NBFC-MFIs by Banks: Key Considerations

Background

Banks in India are often on the look-out for potential acquisition opportunities to spur inorganic growth. While their strategic interests will determine their targets, in recent times, banks have been evaluating acquisition of non-banking financial companies (“NBFCs”) and more specifically micro-finance institutions (“MFIs”), which primarily cater to the rural and…

Forceful selling of Insurance by Automobile Dealers call for Regulation

Background

Automobile sector in India has been growing at a rapid pace, contributing to over 7% of India’s total Gross Domestic Product[1]. With annual sales exceeding 20 million passenger vehicles the mandatory vehicle insurance requirement has led to a commensurate increase in motor insurance business sales. This sector now constitutes 45% of the overall business of general insurance in India.[2]Continue Reading Forceful selling of Insurance by Automobile Dealers : Call for Regulation

Primer on IRDAI Information and Cyber Security Guidelines 2023

Introduction

On September 14, 2023, the Insurance Regulatory and Development Authority of India (“IRDAI”) set up an inter-disciplinary standing committee on cyber security, tasked with regularly reviewing the threats inherent in the existing or emerging technologies and suggest appropriate changes to the IRDAI Information and Cyber Security framework to further strengthen the insurance industry’s cyber security posture and resilience.[1] This is in furtherance to the IRDAI having notified the Information and Cyber Security Guidelines on April 24, 2023 (“CS Guidelines 2023”).Continue Reading Primer on IRDAI Information and Cyber Security Guidelines 2023

Point of Sales Persons An Alternate Distribution Channel for Insurers

Introduction

The Insurance Regulatory and Development Authority of India (“IRDAI”) permits insurance companies and intermediaries to appoint individuals (i.e. natural persons) as Point of Sales Persons (“PoSPs”). PoSPs are essentially individuals who are permitted to carry out activities pertaining to solicitation and marketing of insurance policy products and act as distribution channels for insurers or intermediaries. In accordance with the provisions of the Insurance Act, 1938, sale and solicitation of insurance products can only be carried out by entities licenced by the IRDAI, i.e. either insurers or intermediaries. PoSPs, despite not being “licenced persons”, are “qualified persons” (as discussed below) and carry on the activity of sale and solicitation of insurance products. They are sponsored by insurers or intermediaries to carry on sale and solicitation activities.Continue Reading Point of Sales Persons: An Alternate Distribution Channel for Insurers

Pledge of Shares of an Insurance Company - A discussion on IRDAI clarifications

Introduction

We have in our recent post discussed the clarifications issued by the Insurance Regulatory and Development Authority of India (“IRDAI”)  in relation to Transfer of Shares of an insurance company. These clarifications were notified pursuant to the circular issued to all CMDs and CEOs of insurance and re-insurance companies on July 22, 2020 (“Circular”). However, the Circular also discussed certain critical issues relating to creation of pledge over shares of an insurance company.
Continue Reading Pledge of Shares of an Insurance Company: A discussion on IRDAI clarifications