Reserve Bank of India to tighten norms for working capital limits
In a move to instill discipline among large borrowers with working capital facility, the Reserve Bank of India has mooted a proposal that at least 40 per cent of the sanctioned limit should be a term loan component. For borrowers with an aggregate fund-based working capital limit of Rs 1.5 billion and above from the banking system, a minimum level of ‘loan component’ of 40 per cent shall be effective from October 1, 2018, the RBI said in draft norms placed on its website. It has sought feedback from banks and stakeholders till June 26, 2018.
PNB fraud case: CBI seeks red corner notice against Nirav Modi
The Central Bureau of Investigation (CBI) has approached Interpol, seeking a red corner notice against Nirav Modi and his uncle Mehul Choksi, both of whom are accused in the Rs 140-billion Punjab National Bank (PNB) fraud case. A red corner is a request to locate and provisionally detain a person till the extradition process is complete. It is issued in the case of individuals sought for prosecution or to serve a sentence. A CBI official said the agency’s request had been sent to Interpol.
No provision of summer breaks for NCLT, NCLAT: Government
The government wants National Company Law Tribunals (NCLT) and National Company Law Appellate Tribunal (NCLAT) to work through the summer, without a break, to resolve the corporate insolvency cases that have been piling up. The ministry of corporate affairs (MCA) on June 4 sent separate letters to the NCLAT and the NCLTs saying that there’s no provision for vacation under the rules framed in 2016. The move was sparked by the NCLAT posting a vacation notice on its website announcing a break from June 1 to July 1. The NCLTs plan a 15-day break.
RBI issues guidelines on loan system for delivery of bank credit
The Reserve Bank of India (RBI) on Monday, in “draft guidelines on loan system for delivery of bank credit”, said that borrowers who have a total working capital limit of Rs 150 crore and above should have at least 40% of it as working capital loans from October 1, 2018. It will be revised to 60% from April 1, 2019. Banks provide working capital finance by way of cash creditor overdraft, working capital demand loan, purchase or discount of bills, bank guarantee, letter of credit, factoring, of which cash credit (CC) is by far the most popular mode of working capital financing.
Ruchi Soya case: ANZ Banking Group seeks NCLT intervention
The Australia and New Zealand (ANZ) Banking Group has moved the National Company Law Tribunal (NCLT), seeking its intervention in the insolvency and bankruptcy proceedings against Mumbai-based edible oils manufacturer Ruchi Soya. Appearing on behalf of ANZ Bank, senior counsel Zal Andhyarujina said that the bank had granted multiple forms of credit to Avanti Industries, a palm-oil producer based in Singapore, including six bills of exchange and an export credit contract. The bank hopes that it is classified as a financial creditor to Ruchi Soya, while Avanti Industries is an operational creditor, claiming dues totaling Rs 14.2 billion from Ruchi Soya.
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