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Tag: Lenders

Corporate lenders vs taxman: Round one of bankruptcy bout goes to the lenders

Corporate lenders vs taxman: Round one of bankruptcy bout goes to the lenders

Finance
Administrators selling off bankrupt companies, or their assets piecemeal, need not worry about claims from the income tax authorities. In the pecking order on recoveries, the taxman ranks below the lenders, says a ruling by the National Company Law Appellate Tribunal (NCLAT). The ruling is set to give comfort to lenders looking to recover money without having to worry about the tax implications. Liquidators at S.Kumars had dragged the income tax department to NCLAT after they sold off some of the assets of the company to UPL limited for Rs 43 crore. The tax department was of the view that 1% tax must be paid (tax deducted at source) in this transaction. The liquidator on the other hand contested that in the “waterfall mechanism”, the tax department cannot supersede corporate lenders. “W...
DHFL resolution: Lenders approve Piramal’s bid

DHFL resolution: Lenders approve Piramal’s bid

Finance
NEW DELHI: Debt-ridden mortgage lender DHFL Ltd on Sunday said the Committee of Creditors (CoC) has approved resolution plan submitted by Piramal Capital and Housing Finance Limited, a Piramal Group company. This was approved by the CoC in its 18th meeting concluded on January 15, 2021, DHFL said in a regulatory filing. The "resolution plan submitted by Piramal Capital and Housing Finance Limited was duly approved by CoC by majority voting under section 30(4) of the Insolvency & Bankruptcy Code....as the successful resolution plan," it said. Piramal's bid received 94 per cent votes as compared to 45 per cent for the US-based Oaktree Capital. Since the conclusion of the fifth and final round of the bidding process last month, Piramal and Oaktree Capital each claimed that their bid was t...
Infra sector firms want renegotiation of EPC contracts amid rise in input cost; lenders oppose

Infra sector firms want renegotiation of EPC contracts amid rise in input cost; lenders oppose

Finance
Kolkata: While several private companies in the infrastructure space are raising demand for renegotiation of EPC contracts amid rise in input costs, the World Bank as well as the country's largest commercial lender State Bank of India have voiced their opposition. Concerns have also been raised at different fora by other lenders about the likely impact on the already stressed asset quality and the appetite for lending to core projects if existing contracts are not honoured. "The contract is sacrosanct. It's the contract against which we provide finance," State Bank of India general manager for project finance Sanjay Kumar Singh said Friday. He said that banks have been taking this up with the government at different platforms saying that re-negotiation may become a challenge for them. Pri...
Monetary policy transmission of PSU banks stronger than private lenders: RBI paper

Monetary policy transmission of PSU banks stronger than private lenders: RBI paper

Finance
Mumbai: The monetary policy transmission of state-owned banks in the short-run is stronger than their counterparts in the private sector, and can be improved further with capital infusion, said a RBI working paper. The credit channel of monetary policy transmission is robust in India and its efficacy can be reinforced by better capital position of banks, said the working paper on 'Asset Quality and Credit Channel of Monetary Policy Transmission in India: Some Evidence from Bank-level Data'. "Controlling for asset quality, in the short-run, the credit channel of monetary transmission of public sector banks is stronger relative to that of private sector banks," it said. The Reserve Bank of India said the views expressed in the paper are those of the authors and not of the central bank. Ac...
Lenders give clean chit to Reliance Commercial Finance as GT audit finds no fraud

Lenders give clean chit to Reliance Commercial Finance as GT audit finds no fraud

Finance
NEW DELHI: A group of lenders, including the National Bank for Agriculture and Rural Development (Nabard), has given clean chit to Reliance Commercial Finance Ltd (RCFL), the NBFC arm of Reliance Capital, after an independent forensic audit report from Grant Thornton did not detect any fraud in the RCFL account. As per the report, of the total consolidated debt owed to banks, RCFL accounted for Rs 11,620 crore, Reliance Home Finance Ltd (RHFL) Rs 7,430 crore and Reliance Capital (standalone) Rs 6,750 crore of debt. The consolidated debt includes term loans, cash credit and non-convertible debentures. Last year, lenders had given a go-ahead to appoint Grant Thornton to conduct a forensic audit of two Reliance Capital arms, the listed-RHFL and RCFL. According to banking sources, the conso...