Amendments to the ECB Policy - A Big Boost for Cross-Border Financings

Given prevailing market conditions, Indian corporates have increasingly been facing issues in accessing credit from onshore loan and debt capital markets. Recent Securities and Exchange Board of India (SEBI) regulations aimed at growing the debt capital market in India and reducing dependence of corporate India on loans from the Indian banking sector require that certain Indian companies must necessarily fund a specified percentage of their debt requirements by issuing bonds.

The forthcoming implementation of new norms on single and group exposures for the Indian banking system is also resulting in some of the larger corporates having to look at other options beyond their preferred relationship banks onshore for meeting their debt funding requirements. Both the non-banking sector and the mutual fund industry in India – significant sources for onshore debt markets – are also currently grappling with their own set of challenges. In this environment, these amendments to the External Commercial Borrowing (ECB) framework are most welcome as they will allow Indian companies to look at tapping the offshore loan and bond markets for raising debt capital.
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Reserve bank of India - RBI vs Indian Government

At the heart of any modern democracy lies the doctrine of separation of powers, which ensures division of responsibilities and also structurally validates a key principle of governance, i.e., allowing each institution to function autonomously, while still maintaining accountability within the larger legislative framework. In codifying its own unique (and somewhat limited) interpretation of this doctrine, the Constitution of India delineates functions of the Union and the states, allowing Parliament to legislate on the functions of key agencies such as the Central Bureau of Investigation and the Reserve Bank of India (Entry 38, Seventh Schedule).
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The Government of India and the Reserve Bank of India (RBI) have brought about several measures to resolve non-performing assets (NPAs). Several NPAs may have arisen from credit facilities that were sanctioned by banks as a commercial decision taken in good faith and in the ordinary course of conducting banking business. Equally there could be cases where NPAs arise as a result of siphoning of funds by the borrower or promoters or other connected entities.

Several serving and retired bankers have recently been charged and/or arrested on suspicion of criminal misconduct over alleged loan fraud under the Prevention of Corruption Act, 1988 (Principal Act). There have been instances of arrest of bank officials without any proof of quid pro quo or wrongdoings.


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By utilising its powers under Article 142 of the Indian Constitution, the Supreme Court of India has delivered an unprecedented decision on August 09, 2018 in Chitra Sharma & Ors. v. Union of India and Ors[1]., and other connected matters (the Jaypee / homebuyers Case)[2]. In this era of evolving jurisprudence on the Insolvency and Bankruptcy Code, 2016 (IBC), the Supreme Court, by this landmark decision, has settled some highly debated issues with respect to its implementation and has provided much required certainty. This has been achieved by the Supreme Court paving the way to reset the clock by re-commencing the Corporate Insolvency Resolution Process (CIRP).

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