Shares in Punjab National Bank slid after the lender said it had reported a suspected 38 billion rupee ($554.63 million) fraud in Bhushan Power & Steel Ltd’s account, potentially delaying a sale of the firm’s assets and consequent repayments to creditors, Reuters reported. PNB is among nearly 34 financial creditors who have claimed a collective 473.03 billion rupees from Bhushan Power & Steel Ltd, which the Reserve Bank of India referred to a bankruptcy court in 2017.
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India will inject another 700 billion rupees ($10.2 billion) into state banks, giving them a bigger cushion to absorb loan losses and bolster credit growth at a time when the country’s shadow banks are in retreat, Bloomberg News reported. The new infusion will “boost capital so that credit can be further improved,” Finance Minister Nirmala Sitharaman said on Friday, while presenting the federal budget for the year to March 2020. New measures will be introduced to improve governance at the state lenders, she added, without giving details.
The National Company Law Appellate Tribunal (NCLAT) has directed the Mumbai bench of the NCLT to pass an order over the insolvency plea against 15 Videocon group companies within next three weeks, Business Standard reported. The NCLAT said that taking into consideration the nature of the matter, the National Company Law Tribunal (NCLT) Mumbai should pass an order within three weeks over the insolvency plea filed by banks. The NCLAT order came over the plea filed by the lenders, led by SBI and the Resolution Professional of the company.
Sales of riskier rupee corporate bonds have all but dried up in recent months, in another negative for India’s slowing economy as companies struggle to raise cash, Bloomberg News reported. Issuance of notes graded A+ and lower plunged 84% last quarter from a year earlier to 22.6 billion rupees ($329 million), the least in five years, according to data compiled by Bloomberg. Borrowing costs have also jumped for issuers with lower debt scores, as a crisis in India’s shadow banking sector saps investor demand for riskier securities.
The IRP has given time till July 24 for the employees of Jet Airways to submit their claims…JetLite employees meanwhile are examining their legal options, the official added. JetLite employees have been left stranded in the insolvency proceedings of Jet Airways, the Financial Express reported. As a part of the process, the court-appointed interim resolution professional (IRP) has invited claims from employees of the grounded airline. However, claims of employees who were a part of JetLite, the low-cost arm of the airline, have been rejected, sources said.
Dewan Housing Finance Corp., an Indian mortgage lender that has delayed payment on some of its obligations, plans to ask banks to lend 15 billion rupees ($217 million) every month to help revive the company, a person with knowledge of the proposal said, Bloomberg News reported. The financier, which has about 800 billion rupees of obligations, will submit the resolution plan on July 10 to a consortium of seven lenders led by state-run Union Bank of India, the person said, asking not to be identified as the discussions are private.
India ordered an investigation on Thursday into alleged mismanagement of funds at Jet Airways , which halted operations in April after running out of cash, Reuters reported. The Ministry of Corporate Affairs has ordered India’s Serious Fraud Investigation Office (SFIO) to carry out the investigation, a government order seen by Reuters showed. The order refers to alleged siphoning of funds and unspecified financial irregularities at Jet Airways, which was once India’s largest private airline, but did not include details on the allegations or name any individuals.
India’s state-owned banks had classified 1.50 trillion rupees ($21.76 billion) worth of loans as “wilful defaults” in 2018-19, with the biggest lender State Bank of India accounting for nearly a third, the finance minister said in the parliament, Reuters reported. Under Indian law, wilful defaulters are classified as firms or individuals who own large businesses and deliberately avoid repayments.
Moody’s Investors Service’s India unit has put its chief on leave amid a probe into a controversial rating decision, in the latest sign of trouble in the nation’s credit evaluation industry, Bloomberg News reported. ICRA Ltd.’s board has decided to place Chief Executive Officer Naresh Takkar on leave, the company said in an exchange filing Monday evening. The rater is examining concerns raised in a whistle-blower complaint, sent to it by the regulator, that its executives interfered to guarantee top ratings for a financier that plunged to default just two months later.
The Indian government is considering giving more powers to the central bank to regulate the struggling shadow banking sector, Finance Minister Nirmala Sitharaman informed the Parliament on Monday, the International New York Times reported on a Reuters story. The government does not have any plans to infuse funds in privately-held shadow banks, she said in a written reply. "Government has received a proposal from RBI to strengthen RBI's regulatory and supervisory powers under the Reserve Bank of India Act, 1934, and the same is under consideration," Sitharaman said.