India’s corporate affairs ministry is proposing to extend a suspension of new bankruptcy filings that has been in place since earlier this year, people familiar with the matter said, Bloomberg News reported. The proposal is to extend the halt on new bankruptcy cases for another six months past its currently scheduled ending point this week. It must get final approval from Finance and Corporate Affairs Minister Nirmala Sitharaman, according to the people, who asked not to be identified because the details are private.
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Small businesses in India, already struggling amid the pandemic, are now having to repay mounting debt after a loan holiday ended last month, Bloomberg News reported. The Reserve Bank of India gave borrowers a six-month freeze on their loan repayments, which ended on Aug. 31, with about a third of India’s $1.8 trillion outstanding loans being deferred under the program. Businesses still trying to cope with a collapse in demand must now figure out how to pay back their loans or face closure. That’s a dilemma Regi Philip is dealing with.
Appellate tribunal NCLAT has directed that a plea by JM Financial Asset Reconstruction Company to initiate insolvency proceedings against Samay Electronics be placed before a third member of the NCLT Ahmedabad bench after two other members of the same bench gave a split verdict in the matter, Outlook reported. The two-member Ahmedabad bench of the National Company Law Tribunal (NCLT) had delivered the split verdict on February 26, 2020.
The Parliament on Monday passed a bill that temporarily suspends initiation of corporate insolvency resolution process under the IBC, for a period not exceeding one year from March 25, to provide relief to companies affected by COVID-19 to recover from the financial stress, Big News Network.com reported. The Lok Sabha passed the Insolvency and Bankruptcy Code (Second Amendment) Bill 2020 after a reply by Finance and Corporate Affairs Minister Nirmala Sitharaman. The bill had earlier been passed by the Rajya Sabha and will replace an ordinance brought by the government.
India’s Supreme Court rejected a petition by State Bank of India, the nation’s largest lender, to allow a personal bankruptcy case against tycoon Anil Ambani to resume, Bloomberg News reported. A three-judge panel headed by Justice L. Nageswara Rao ruled that the bankruptcy case against the former billionaire will remain suspended and directed the Delhi High Court to decide on Ambani’s challenge to provisions of India’s insolvency law. The case is among the first high-profile ones after rules were set for personal bankruptcy last year.
An Indian court has issued a second arrest warrant for a marine refuelling tanker owned by troubled UAE oil trader GP Global after it failed to make payments to its ship manager, court documents showed, Reuters reported. On Sept. 10, the High Court of the western Indian state of Gujrat granted the vessel manager’s, Singapore-based Celestial Ship Management Pte Ltd, a request to arrest the GP B3 bunker tanker for unpaid dues, according to the court documents seen by Reuters.
An Indian court has ordered the seizure of a tanker belonging to Dubai-based oil trading firm GP Global after a petition from UAE lender National Bank of Fujairah over a loan default, a court document showed, Reuters reported. The Gujarat High Court directed the authorities of Pipavav Port on Sept. 9 to seize the company’s bunkering tanker, GP B3, and detain it until a further court order or until the outstanding loan amount of just over $2 million is paid, a court document seen by Reuters shows. The next hearing is on Sept. 17.
India’s top court extended the easing of rules over the classification of non-performing loans until further notice, delaying the disclosure of how much bad debt banks hold, Bloomberg News reported. The three-judge bench headed by Justice Ashok Bhushan on Thursday gave the government two weeks to come up with relief measures for virus-hit businesses and said such a decision had to be put before the court for consideration. It also reiterated that banks must not classify any loans as bad if they were performing at the end of August until further order.
Lenders will have to consider financial parameters such as liquidity and debt-servicing ratios while preparing a restructuring plan for loan accounts that have turned bad due to the coronavirus pandemic, the Reserve Bank of India said following the recommendations of an external panel, Bloomberg News reported. The central bank identified 26 sectors affected by the pandemic such as auto, aviation and tourism, which can be offered a resolution subject to criteria including debt-coverage ratio, outstanding liabilities and net worth at pre-Covid levels.
Finance minister Nirmala Sitharaman on Thursday asked banks and NBFCs to roll out loan restructuring scheme for COVID-19 related stress by September 15, and provide adequate support to the borrowers following the lifting of moratorium on repayment of debts, The Times of India reported. The minister urged lenders to immediately put in place a board-approved policy for resolution at the review meeting with heads of scheduled commercial banks and NBFCs through video conferencing.