More Indian banks entangled in PNB fraud
At least three more Indian banks – two from the public sector and one private – are likely to have been caught in the Rs 11,000-crore fraud that hit the Punjab National Bank (PNB) on Wednesday. Union Bank of India, Allahabad Bank and Axis Bank are said to have offered credit based on letters of undertaking (LOUs) issued by PNB. An LOU is in effect a letter of comfort issued by one bank to branches of other banks, based on which foreign branches offer credit to buyers. Foreign branches of these banks, which had relationships with the outlets of a jewellery company, had taken significant exposures.
Expect more NPAs to come under IBC resolution
The Reserve Bank of India has come out with revised guidelines, setting out a framework for timely resolution of stressed assets through the use of the Insolvency and Bankruptcy Code (IBC). They have withdrawn the existing forbearances allowed earlier , such as CDR, SDR, S4A, 5:25, etc, which is likely to result in an acceleration of NPA formation.
ICAI to come out with concept paper on virtual currencies
Chartered accountants’ apex body ICAI is looking into various aspects of virtual currencies and will come out with a concept paper on the same, according to its president Naveen N D Gupta. There are rising concerns about investments in virtual currencies such as bitcoins, which have seen significant volatility in trading globally, while there is no framework yet in India to regulate such activities. A committee, chaired by Secretary, Department of Economic Affairs, is looking into all the issues related to virtual currencies and crypto-assets. The Institute of Chartered Accountants of India (ICAI) is also looking into the issue of virtual currencies.
Paytm’s Vijay Shekhar Sharma kicks up a storm over WhatsApp pay
Vijay Shekhar Sharma, the founder of India’s largest digital payments company Paytm, will petition the architect of the country’s unified digital payment system (UPI) for redressal of what he termed as an unfair playing field accorded to messaging service provider WhatsApp, which has begun testing its payment service in the country. WhatsApp trial service launched in India last week does not require a log-in session and Aadhaar-based payments. Sharma said he will approach the National Payments Corporation of India (NPCI), which has developed the UPI system, and even higher authorities to highlight this issue.
RBI norms add to NCLT burden
The National Company Law Tribunal, already burdened with about 2,000 bankruptcy cases pending, may see a flurry of fresh cases that may affect time-bound resolution after the banking regulator revamped the way loan defaults are to be handled, lawyers and bankers said. “Right now, only some of the large cases are being tried, but there are several cases in the SME (small and medium enterprise) and mid-cap space where we have done restructuring and it has failed. If we send so many of these cases to NCLT, I don’t know how the logistics will work,” said a banker.
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