Bhushan Power: Little liberty for lenders to select winning bidder
Even though it is yet to take a call on whether the late submission of bid by Liberty House for the bankrupt Bhushan Power and Steel is valid or not, the National Company Law Appellate Tribunal (NCLAT) on Friday directed the committee of creditors (CoC) to convene its meeting, consider all the three bids — from Tata Steel, JSW Steel and Liberty House — decide the H1 and H2 bidders and submit the proposal to the National Company Law Tribunal for adjudication. However, it said that while the NCLT may decide which is the better bid — H1 or H2 — based on the recommendation of the CoC, it will not disclose the name till the appellate tribunal decides on the eligibility of Liberty House. Normally the CoC does not recommend two bids to the NCLT for approval but the NCLAT has asked it to place two choices so that if one of the bids fails, the process does not get delayed and the other one gets the go-ahead
IDBI Bank Deal: LIC may have to reduce stake in other lenders
Life Insurance Corporation (LIC) will have to convince the Reserve Bank of India (RBI) that its acquisition of a majority stake in state-run IDBI Bank will not pose any conflict of interest with its holding in a number of other banks, and that it won’t jeopardize stability in the broader financial system either, a source told FE. One way for LIC to strengthen its case would be to give a commitment to the banking regulator that it would trim its stake to below 10% in a number of banks within a strict time frame, said the source. The central bank may soon consider whether LIC is fit and proper to be the promoter of IDBI Bank, said the source. LIC wants to be the promoter of IDBI Bank after raising its stake to 51% from 7.98% now. At present, LIC holds over 13.64% in Axis Bank, 13.03% in Corporation Bank, 12.24% in Punjab National Bank, 10.23% in State Bank of India and 10.20% in Syndicate Bank.
Rajya Sabha Ok: Anti-graft Bill to aid bold decisions
Public servants, especially bankers, will heave a sigh of relief as the Rajya Sabha has approved the Prevention of Corruption (Amendment) Bill, 2013, that drastically reduces the scope of their being probed or arrested for genuine errors of judgment in policymaking and will thus enable them to take bold commercial decisions. It also seeks to punish bribe-givers for the first time, with a provision to jail them for up to seven years. Since the Bill has already crossed the Upper House hurdle, it will easily sail through the Lok Sabha where the ruling NDA has a majority. The Bill seeks to amend the existing 30-year-old anti-corruption law.
GST Council to mull rate reduction for over 3 dozen goods
The Goods and Services Tax (GST) Council in its 28th meeting will consider reduction of rates for more than three dozen goods including items classified under ‘handicrafts’. Although the agenda circulated for Saturday meeting doesn’t include bringing natural gas and the ATF under the GST, government officials said discussion on this issue could also be taken up if time permits. The GST Council had earlier argued against exempting sanitary napkins citing blockage of input tax credit (ITC) to manufacturers, making it unviable against imports. However, the fitment committee is believed to have agreed to exempt the status as the product is an essential item for health and hygiene.
Regulate cryptocurrency to curb illegal transaction: RBI to Supreme Court
The Reserve Bank of India (RBI) on Friday told the Supreme Court that it is necessary to regulate the Bitcoin and other cryptocurrencies to check illegal transactions which will impact the international flow of funds. The RBI told the bench of Chief Justice Dipak Misra, Justice A.M. Khanwilkar and Justice D.Y. Chandrachud that its stand is of extreme caution as it has severe policy implications. Appearing for the RBI, senior counsel Shyam Divan said they have a particular stand and other departments may have other positions. Divan told the court that a committee is looking into the issue and as such RBI will require three weeks time to respond to various petitions seeking such regulations. The senior counsel was referring to an interdisciplinary committee headed by secretary of economic affairs Subhash Garg that was set-up in 2017 to examine virtual currencies and recommend the regulatory framework for crypto currencies.
Sebi proposes framework on 25% borrowing via corporate bonds for large companies
To deepen the corporate bonds market, Sebi today came out with a proposal that will require large corporates to raise 25 per cent borrowings through this route from next fiscal. The framework is proposed to be implemented from April 1 next year and the large corporates identified as on March 31, 2019 will have to garner at least 25 per cent of their borrowings made in 2019-20 through bond market, Sebi said in a consultation paper. This is part of an effort to reduce reliance on banks for financing corporates and simultaneously developing a liquid and vibrant corporate bond market. Given the current stage of development of bond market in the country, Sebi said that any mandatory requirement would need to be ‘light-touch’ in nature and would also need to provide enough leeway to the identified corporates to meet the mandatory requirement from the bond market.
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