In June 2020 the Ministry of Corporate Affairs issued the Companies (Share Capital and Debentures) Amendment Rules 2020, doing away with the non-convertible debentures (NCD) deposit requirement for all listed companies (including non-banking financial companies and home finance companies) in the context of their issuance of privately placed debentures. This article examines the genesis of the NCD deposit requirement and whether there is a case for further relaxations, among other things.
With the enactment of the Factoring Regulation Act 2011, for the first time a consolidated legal framework governing all aspects of and codifying the law applicable to factoring transactions was introduced in India. While the act's introduction was important, its Achilles heel has always been the limitations that it places on the types of entity which can engage in the factoring business – in particular, its peculiar treatment of non-banking financial companies, an important class of lenders in India.
Securitisation as a structured finance mechanism has several commercial advantages, including balance sheet and risk management, increased liquidity, cost-efficient financing, the marketability of the resulting securities and the opportunity for portfolio diversification. With the continuing need for liquidity by non-banking financial companies, the growing appetite of investors and the developments on the regulatory front, securitisation is likely to remain on the upward curve in the near future.
The Reserve Bank of India recently issued a circular introducing changes to the regulatory framework for housing finance companies (HFCs). Among other things, the circular defines what constitutes an HFC, sets out the minimum net owned funds required by HFCs and sets out the requirements for non-banking financial company-investment and credit companies. This article examines the recent changes.
The Reserve Bank of India recently announced a resolution framework for COVID-19-related stress to address borrower default pursuant to the stress caused by the pandemic without necessitating a change of ownership and without an asset classification downgrade modifying the existing framework. This article focuses on the key changes introduced for corporate loan accounts (ie, exposures other than personal loans).