National Monetisation Pipeline – Fueling Economic Growth

INTRODUCTION

Monetisation of assets has  been  identified as one of the pillars for enhanced and sustainable infrastructure financing. The Finance Minister of India (“FM”) had, in December 2019, announced a National Infrastructure Pipeline (“NIP”) that envisages an investment of INR 111 lakh crore in the infrastructure sector in the period between 2019 and 2025 and brings in various opportunities for private sector to invest in infrastructure projects including the development and operation of the same. The FM in the annual budget 2021-2022 announced the launch of a new national monetisation pipeline[1] to bridge the gaps in infrastructure funding projects under the NIP and to unlock value from the current public investment in infrastructure through private sector efficiencies in operations and management of infrastructure. The NITI Aayog has now created the National Monetisation Pipeline (NMP Volumes I & II) (“NMP”) in respect of the brownfield core infrastructure assets. The NMP is in furtherance of the Government of India’s (“Government”) strategic divestment policy, which aims to limit Government’s presence to only a select identified sectors with the rest to be handed to private players.


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Flight and Fall Transmitting Power: Judicial Initiative to Retain Ecological Balance in Society

The renewable energy sector, while promising an environment friendly production of clean electricity, has posed a threat to the environment in certain situations. Recently, a public interest litigation before the Supreme Court, brought forward one such environmental hazard posed by the sector. The overhead transmission lines installed around solar and wind power projects (“Projects”) are posing an extinction risk to endangered birds (such as (i) the Great Indian Bustard (GIB); and (ii) the Lesser Florican).


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A transition away from LIBOR – What it means for ECB lending in India

LIBOR may be the most popular acronym in the international financial markets, and rightfully so. It has for decades been the benchmark rate adopted worldwide for financial transactions ranging from loans, bonds and derivatives. Often touted as the ‘world’s most important number[1], it first made its appearance in 1969 and has since then established itself as the go to reference rate for all things money.
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NeSL - THE NEW WAY OF ELECTRONIC EXECUTION

 INTRODUCTION

Execution of a document means the placement of signatures by all persons who are required by the character of the instrument to sign the same in order to give it a binding effect under law. It is based on the classic principle of consensus ad idem i.e. two parties entering a contract should agree upon the same thing in the same sense. One amongst the many problems for closure of transactions posed by COVID-19 is the mechanism of execution of documents. The traditional way of executing agreements involved the parties to be physically present at a place and affix the signatures, stamps, common seals, etc., along with paying the necessary stamp duty as prescribed under the relevant stamp laws. However, with the imposition of a nationwide lockdown, travel restrictions and norms of social distancing in place, the manner of execution of documents has had to be reimagined.
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Housing Finance Companies - Proposed changes by RBI

The Central Government had, with effect from August 09, 2019, transferred regulatory powers of the Housing Finance Companies (“HFCs”) from the National Housing Bank (“NHB”) to the Reserve Bank of India (“RBI”). It is further stated that the RBI will review the extant of regulatory framework applicable to HFCs and issue the same in due course.  Until such time, HFCs were required to comply with the directions and instructions issued by NHB.[1]

Pursuant to the above and in order to increase the efficiency of HFCs, the RBI has now placed a draft of the changes proposed in the regulations applicable to HFCs for public comments till July 15, 2020, which we have briefly summarised below:
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To battle the ongoing COVID-19 pandemic, the central government and the various state governments imposed a nationwide lockdown in India. Additionally, to arrest the spread of the pandemic, government authorities and corporates are promoting “work from home”, and wherever necessary to work with minimum work force. Acknowledging the difficulties faced by corporates on account of the threat posed by COVID-19, requiring social distancing in day-to-day functioning, governmental authorities have granted various exemptions and reliefs by issuing circulars and amending rules to ease compliance requirements to be complied by companies.

This blog analyses the recent reliefs and relaxations announced by the Ministry of Corporate Affairs, Government of India (MCA), and the Securities and Exchange Board of India (SEBI), which may have an impact on financing transactions.


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Battling Covid -19 and Liquidity– The twin crisis of NBFC sector

While the health crisis has brought the country to its knees, the fatal blow seems to be coming our way from the economic effects of the Covid-19 pandemic. The exposure of the severely-stressed para banking industry to risky segments in these times has made it even more vulnerable to an economic slowdown.[1] With its asset quality deteriorating at an increasing rate, the liquidity in para banking industry has been squeezed off to its last drops.

The impact of the liquidity crisis across various classes of non-banking financial companies (“NBFCs”) may be analysed vis-à-vis the exposure it has towards the borrower segments whose economic activities have been severely impacted.  With the economic and consumption activities a bust in sectors such as real estate and micro-finance, the NBFCs with loan exposures in the said sectors will be hit the worst in the wave of this global pandemic. The increasing loan losses and inaccessibility to new capital is likely to exacerbate the liquidity stress.
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How special are “special equities”- Analysis of invocation of bank guarantee during COVID-19

A pandemic, of the nature which affects the world today, has not visited us during the lifetime of any of us and, hopefully, would not visit us hereinafter either. The devastation, human, economic, social and political, that has resulted as a consequence thereof, is unprecedented. The measures, to which the executive administration has had to resort, to somehow contain the fury of the pandemic, are equally unprecedented. The situation of nationwide lockdown, in which we find ourselves today, has never, earlier, been imposed on the country. The imposition of the lockdown was by way of a sudden and emergent measure, of which no advance knowledge could be credited to the petitioner – or, indeed, to anyone else.” – C. Hari Shankar, J., April 20, 2020.

The above quote aptly sums up the current situation globally and domestically. The COVID-19 outbreak has created a void in terms of performance of commercial contracts and has in many cases left the parties on edge. Through this article, we aim to provide an insight into the orders passed by the judiciary during COVID-19, dealing with an otherwise settled issue i.e. the invocation of bank guarantee.
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Asset Classification - Be-hold

With the outbreak of the COVID-19 pandemic and the consequential countrywide lockdown, economic activities of almost all corporates, except those falling under essential services, have witnessed an unprecedented slowdown. As a result, cashflows and debt servicing capabilities of most borrowers have been seriously impacted, necessitating the Reserve Bank of India (“RBI”) to intervene and introduce a regulatory framework, enabling lenders to provide much needed relief to their borrowers.

This blog analyses the relaxation of the asset classification norms to be followed by a bank, with respect to a term loan[1] on account of the measures introduced by the RBI on March 27 and April 17, 2020 and related judicial pronouncements.
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The idea of Mumbai Metro - Is the world developing or dying?

The Mumbai metro project (“Metro Project”) was conceptualised to develop an efficient and sustainable urban transport system in the financial capital of the country, involving  a significant investment of USD 2,500 million.[1] Every day some 80,00,000 commuters use the city’s suburban rail system, enabled through more than 2,800 trains a day. The network is severely overcrowded during peak hours when the number of passengers exceed the network’s carrying capacity by more than four times, leading to numerous safety hazards.[2]

Last year witnessed a massive protest for saving the Aarey milk colony located in suburban Goregaon (“Aarey’), a green belt with over 5,00,000 trees, a rarity in the concrete city. The construction of a metro car depot on the flood plains of the Mithi river at Aarey for expansion of metro services in the city received much wrath from environment activists, citizens and even courts for cutting down 2,600 trees overnight. While there is a stay on cutting more trees until the matter is sub-judice, the construction work of the Metro Project was not stopped, until the outbreak of a worldwide pandemic, COVID-19 or Coronavirus.
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