Monday, January 18

Finance

SBI initiates insolvency proceedings against Videocon promoters

SBI initiates insolvency proceedings against Videocon promoters

Finance
A Mumbai bench of the National Company Law Tribunal (NCLT) has initiated personal insolvency proceedings against Videocon Industries promoters Rajkumar Dhoot and Pradipkumar Dhoot adding to the Dhoot family's problems even as they are under investigation by the Central Bureau of Investigation (CBI). In a petition filed by Videocon resolution professional Asish Narayan on behalf of the group's largest lender State Bank of India (SBI), insolvency petitions have been initiated against the Dhoots in their capacity as personal guarantors to recover dues from the company. In two separate petitions both seen by ET, SBI has sought to invoke Rs 6158 crore of personal guarantee given by Pradipkumar Dhoot to pay off the oustanding loans of the group while Rs 5353 crore has been sought to be recovere...
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 ...
Plea in Delhi High Court against Lakshmi Vilas Bank-DBS merger says shareholders shortchanged

Plea in Delhi High Court against Lakshmi Vilas Bank-DBS merger says shareholders shortchanged

Finance
NEW DELHI: A plea in the Delhi High Court has challenged the scheme of amalgamation of Lakshmi Vilas Bank with Development Bank of Singapore (DBS), contending that its shareholders have been "left in the lurch" and the Centre and the Reserve Bank have failed to protect their interests. The petition was listed before a bench of Chief Justice D N Patel and Justice Jyoti Singh on January 13, but was adjourned to February 19 after the bench was told that the Reserve Bank of India (RBI) has moved a plea in the Supreme Court to transfer all pleas against the amalgamation scheme to the Bombay High Court. The petition in the Delhi High Court has been filed by lawyer Sudhir Kathpalia, who was also a shareholder in Lakshmi Vilas Bank (LVB) and lost his 20,000 shares in the company due to the amalg...
lending apps: Debt trap: Inside the world of shady digital lending apps, which promise a loan in a minute

lending apps: Debt trap: Inside the world of shady digital lending apps, which promise a loan in a minute

Finance
Last August, Anitha (name changed to protect identity) needed some money urgently. The lockdown was a challenging period for the Hyderabad-based media professional, especially on the financial front. Even as she approached formal lenders for a personal loan, some doomscrolling on her smartphone resulted in a blaze of advertisements with a sole promise — that of an instant loan. “They looked like a saviour to me at that stage of my life,” she says over the phone. “I immediately took one of these loans.” The process was simple and quick. All she had to do was scan her Aadhaar card and PAN number and click a selfie and upload these on the app. “There was no OTP-based authentication or even a requirement for an esignature. They don’t even have a signature of the account holder,” she says. Lit
Banks parked Rs 2 trillion excess cash amid RBI signalling

Banks parked Rs 2 trillion excess cash amid RBI signalling

Finance
MUMBAI: The Reserve Bank of India (RBI) Friday signalled its intent to haul slumping overnight rates closer to the relevant benchmark when it accepted Rs. 2 lakh crore in reverse repo bids at 11 basis points higher than the reference gauge. The cut-off yield, above which banks cannot claim a rate for parking excess cash, was at 3.55 percent. That was higher than the average market expectations, dealers said. The acceptance of bids well above the policy rate shows that it would step in to absorb excess liquidity whenever the market rates fall too low. RBI Friday conducted a 14-day variable reverse repo auction to suck out excess cash from the banking system that has a surplus of Rs 5.6 lakh crore. “The auction results indicate gradual removal of surplus liquidity and hardening of short-te
DHFL D-Day: Ajay Piramal wins race to acquire Dewan Housing Finance Ltd – The Economic Times Video

DHFL D-Day: Ajay Piramal wins race to acquire Dewan Housing Finance Ltd – The Economic Times Video

Finance
DHFL D-Day: Ajay Piramal wins race to acquire Dewan Housing Finance Ltd - The Economic Times Video | ET NowET Now | 15 Jan 2021, 10:40 PM ISTBillionaire Ajay Piramal won the most contested bankruptcy bid for Dewan Housing Finance Ltd., trumping distressed fund Oaktree Capital and Adani Capital as creditors overwhelmingly voted for the drug-maker turned real estate and mortgage lender.405viewsOaktree emerges highest bidder for DHFL; Kapil Wadhawan offers fresh proposal to repay 100% within 8 yrsViews: 1085DHFL suitors get time till Dec 13 to submit bidsViews: 2864Tatas plan to take head on Reliance Jio and SBI, to setup retail payments networkViews: 3925RBI fast-tracks DHFL resolution, appoints advisory committee to assist administratorViews: 2208Uday Kotak gets one-year extension on IL&am...
PSU lenders back Piramal’s DHFL bid

PSU lenders back Piramal’s DHFL bid

Finance
(This story originally appeared in on Jan 15, 2021)Mumbai: Public sector banks, led by SBI, are understood to be in favour of the resolution plan submitted by Piramal Group for troubled housing finance company DHFL. PSU lenders hold a significant portion of the debt and are likely to determine the direction of voting by financial creditors, which concludes on January 15. Although there are five eligible bids that creditors are voting on, the bid for DHFL has turned out to be a two-horse race between the Piramal Group and Oaktree Capital. The two have raised a lot of heat and dust with claims and counterclaims. According to sources, lenders are taking a decision based on the amount of upfront cash offered, the net present value of future payments, and the business plan. One of the factors...
IRDAI’s expert committee of doctors and scientists to suggest ways to improve health insurance in India

IRDAI’s expert committee of doctors and scientists to suggest ways to improve health insurance in India

Finance
MUMBAI: India’s insurance regulator IRDAI has set up an advisory committee composing some of the country's foremost medical practitioners and researchers to improve the quality of product and coverage of the health insurance in the country. “Health Insurance in India has grown significantly in recent years and is expected to continue in the coming years,” the regulator said in an order released on Wednesday. The move comes at a time when the government is mulling ways to improve penetration of health insurance in India, which at less than 4% of the GDP is below par compared to most advanced and emerging economies. “IRDAI has taken various steps to ensure orderly growth, improving efficiencies of health insurance system and protect the interests of the policyholders. In this background, i
RBI constitutes working group on digital lending – The Economic Times Video

RBI constitutes working group on digital lending – The Economic Times Video

Finance
The Reserve Bank of India (RBI) on Wednesday said that it has constituted a Working Group on digital lending including lending through online platforms and mobile apps. This comes in the backdrop of multiple instances of suicides caused by harassment and high handed recovery methods used by lending apps. The Working Group will study all aspects of digital lending activities in the regulated financial sector as well as by unregulated players so that an appropriate regulatory approach can be put in place, said RBI. The group consists of four internal members and two external members with RBI Executive Director Jayant Kumar Dash as the Chairman of the Group. The Group has been advised to submit its report within three months, RBI said.
View: A guru and a tycoon feel India’s endless bank salvage pain

View: A guru and a tycoon feel India’s endless bank salvage pain

Finance
After years of trying, making India’s broken banks whole is still very much like pulling teeth. The twists and turns in the $12 billion bankruptcy of a housing finance company shows how challenging it may be for the country to nurse its post-pandemic financial system to health. The state-dominated lending system’s aggregate balance sheet had a gaping hole even before Covid-19. Now things could turn uglier. The regulator’s latest stress test projects nonperforming assets to jump to 13.5% of loans and advances by September in its baseline scenario, and 14.8% in the worst-case situation, almost doubling from 7.5% a year earlier. Alarming as they are, the numbers shouldn’t be a surprise. India imposed one of the world’s harshest lockdowns in March and kept it going through much of the second