Lanco Infra tech, ABG Shipyard & Alok Industries may face liquidation
Top officials at leading banks fear that the insolvency resolution process at three companies with dues of about Rs 1 Lakh crore is likely to fail, leading inevitably to liquidation. Lenders are unwilling to accept offers for Lanco Infratech, ABG Shipyard and Alok Industries that involve substantial haircuts over concerns that such deals will lead to investigations and harassment later on and because the bids are close to the liquidation value anyway, said the three executives.
RBI firm on new NPA rules, says cos should not take loan contract casually
Reserve Bank of India (RBI) deputy governor N S Vishwanathan strongly defended its new rules on debt resolution, including the one-day default norm, stating that banks should get into action before any such default takes place and that companies should not take the covenants of a loan contract casually. “The debt contract embedded in bank loans has been continuously losing its sanctity, especially where the borrowing is large. There is a need to change this and restore sanctity of the debt contract, lest bank debt becomes subordinate even to equity,” said Vishwanathan at the National Institute of Bank Management, Pune.
Supreme Court says biometric authentication of Aadhaar prone to misuse
If biometric authentication is attached to every transaction entered into by a person, it would “form a wealth of information” necessitating the need for data protection, the Supreme Court observed on Wednesday. A five judge bench headed by Chief Justice Dipak Misra, hearing a clutch of petitions challenging Aadhaar and its enabling 2016 law, apprised the UIDAI of its apprehensions saying biometric authentication of Aadhaar number in every transaction could lead to aggregation of meta data of citizens, which can be collated and used for many purposes including surveillance.
Govt approaches NCLAT to attach properties of people involved in PNB scam
The government has approached the National Company Law Appellate Tribunal (NCLAT) seeking modification of an NCLT order so that it can attach the properties of those involved in the $2 billion PNB fraud. In a petition, the corporate affairs ministry has also sought to invoke powers including the removal of the management and recovery of undue gains. The plea seeks modification of the order passed by the Mumbai bench of the National Company Law Tribunal (NCLT) by adding sections such as 241, 242, and 246 read with 339 of the Companies Act.
Law Commission urges government to bring BCCI under RTI Act
Rejecting the argument that Board of Control for Cricket in India (BCCI) is a private body, Law Commission on Wednesday recommended the centre that BCCI along with its constituent member cricketing associations should come under the purview of Right to Information (RTI) Act. Today’s development comes after the Law Commission released a draft white paper on Tuesday, recommending holding of simultaneous elections to the Lok Sabha and the Assemblies, possibly in 2019.
The underlying reason for the ATM cash crunch
During the two-year period 2016-18, currency with the public went up by 10.2%. That was less than half of the growth in nominal gross domestic product (GDP), which went up by 21.7% over the period. Why are we taking a two-year instead of a one-year period? Because year-on-year comparisons are skewed due to the demonetization episode. Next, let’s consider the preceding two-year periods. During 2014-16, currency with the public moved up by 28.3%, well above the growth of nominal GDP, which was 22.5% (see chart).
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