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Mumbai, Union Bank of India on Friday said it has identified eight troubled accounts worth Rs 3,000 crore to be sold to the national <keyword id="6605010" type="General" weightage="20" keywordseo="bad-bank" source="Orion">bad bank</keyword> <keyword id="11291018" type="General" weightage="20" keywordseo="narcl" source="Orion">NARCL</keyword> this fiscal. The lender has more than doubled its net income at Rs 3,236 crore in the June 2023 quarter on improved asset quality and recoveries. The city-based bank had already sold three accounts worth Rs 900 crore last fiscal to the national bad bank at a recovery of 33 per cent. We have sort of identified as many as 42 troubled accounts with an outstanding of Rs 10,000 crore to be sold to the National Asset Reconstruction Company (NARCL). Of these, we hope to sell at least eight of them to that central government-owned bad bank this fiscal, A Manimekhalai, the chief executive and managing director of the public sector lender, told reporters at the bank's post-earnings presser here. Union Bank was one of the first lenders to sell its NPAs to NARCL in the first lot of the bad bank's such transactions. The bank had recovered Rs 20,000 crore from written-offs/upgrades or one-time settlements but this year it will be around a quarter of that only, she said as the overall quantum of bad assets has fallen drastically. Of the Rs 20,000 crore, cash recovery alone was Rs 5,500 crore, which it expects to fall to Rs 4,500 crore this year. The bank's overall gross bad loan ratio is came down by 288 bps to 7.34 per cent (Rs 60,104 crore) now and net NPAs by 173 bps to 1.58 per cent (Rs 12,138 crore), and hopes to bring it further down to under-6 per cent by March, she said, adding as a result, provisions for bad loans came down to Rs 1,984 crore from Rs 3,653 crore. Manimekhalai also said the bank will be raising Rs 10,000 crore in equity capital not to buffer up its core capital base but to meet the Sebi mandate of having a 25 per cent public float. Of the planned Rs 10,000 crore capital raising, Rs 8,000 crore will be equity capital and the remaining will be tier 1 &amp; 2 capital. We are more than adequately capitalised. This fundraising is to meet the 25 per cent mandatory public float, she explained. The government currently holds an 83.49 per cent stake in the bank, which has to be brought down to 75 per cent under the Sebi's listing rules. The core capital stood at 15.95 per cent from 14.42 per cent of which CET 1 (Common Equity Tier 1) stood at 12.34 per cent from 10.68 per cent, she said. The bank's profit rose 107.7 per cent to Rs 3,236 crore from Rs 1,558 crore on a steep fall in bad loans and an improvement in interest income. The total income rose to Rs 27,381 crore from Rs 20,991 crore in the same period a year ago, of which interest income improved to Rs 23,478 crore from Rs 18,174 crore.

Union Bank to sell 8 troubled accounts worth Rs 3,000 cr to bad bank NARCL

During the month of August 21, the August Standing Committee on Finance submitted its report on the implementation of the <keyword id="128499" type="General" weightage="100" keywordseo="insolvency" source="Orion">Insolvency</keyword> and Bankruptcy Code, the only comprehensive resolution mechanism for all forms of debt resolution which transformed India’s ease of doing business and propelled credit resolutions in India unprecedented in its history. However, as with all new regulations, the law takes its time to settle. Having said that there are certainly some learnings which need to be factored based on experience which may require attitudinal or regulatory change. Key issues are broadly around regulation changes and capacity building. I would focus the piece on capacity building, which I believe is the elephant in the room. The efficiency of courts is first on my list. Our courts today have 13,170 <keyword id="192838" type="General" weightage="20" keywordseo="ibc" source="Orion">IBC</keyword> ( Insolvency and Bankruptcy Code) cases pending for approximately INR 9 lakh crores with 71% of the cases being more than 180 days. Apart from the vacancies at the <keyword id="6355809" type="General" weightage="20" keywordseo="nclt" source="Orion">NCLT</keyword> (National Company Law Tribunal) and NCLAT (National Company Law Appellate Tribunal) and the high level of litigation, the key issue on hand is the approach of the judges. Liberal stays at the slightest instance, encouraging plans from the defaulters whom the Committee of Creditors (CoC) have refused to entertain under the 12A provisions, allowing individual creditors to litigate at every step and adjudicating <keyword id="6155516" type="General" weightage="20" keywordseo="financial-creditor" source="Orion">Financial Creditor</keyword> admissions to IBC are tools used by vested interests to delay resolutions. The Rules need to differentiate between what is essentially a court filing from a compliance perspective from that of an adjudicating perspective. Our rules and hence our courts adjudicate matters which are essentially just procedures. Examples are Admissions to NCLT, approval of Final plan, process extensions, court filing requirements under IBC. A detailed study of differentiation between adjudication and compliance needs to be thought through. Also, Technical and Judicial members need to adhere to the same timelines as the rest of the ecosystem. This would require a detailed understanding and appreciation of the insolvency process and the law which at present seems lacking. Insolvency professionals are the second on my list. In our quest to build capacity to address the high levels of NPAs in 2016, we introduced over 3000 insolvency professionals with an entrance exam based on levels of seniority and qualifications. Whilst the professionals, mainly accountants started behaving like consultants rather than business managers who are required to preserve enterprise value during the <keyword id="1061688" type="General" weightage="20" keywordseo="CIRP" source="Orion">CIRP</keyword> (corporate insolvency resolution process) period. The focus too moved more toward regulatory compliance rather than business revival. To add to it the regulator focussed on process rather than value creation. Most of the 150-odd show-cause notices issued pertained to compliance with regulation as against business conduct. The supervisory aspect needs to include business conduct reviews within the spirit of regulation rather than bind the Insolvency professional to compliance as the latter only deters maintaining of Enterprise value. The Insolvency professional on his part needs to show utmost integrity and needs to be compensated for the same so as to remain honest. There is a lot of debate around the adequacy of insolvency professional’s fees which I think is a complete waste of time. The insolvency professional should be encouraged to appoint advisors where his skills are enhanced and not seek legal advice at every stage. The culture would come once the system trusts these professionals and the professionals demonstrate credibility. To build an enhanced Insolvency professionals, a continuing education program is required and members who are either found to not do them or have been found for any business-related irregularity should be barred from the profession for life. The Committee of Creditors is the final one on my list. They are the custodians of all classes of creditors and need to operate as a board of directors to protect the best interest of the company during CIRP. The CoC needs to mandate attendance of at least a Chief General Manager level person for all critical discussions and matters that require voting of 66%, for finalising the process for sale, negotiation with <keyword id="6078018" type="General" weightage="20" keywordseo="resolution-applicants" source="Orion">Resolution Applicants</keyword> and for discussion of all Avoidance applications. Further, the CoC should ensure that bankers provide interim finance to keep the operations going within established parameters. The CoC also needs to recognise that the Insolvency Professional is appointed by them to serve the creditors better and there may not be a need to appoint CoC advisors as different from RP advisors. If the need is felt, CoC advisors cannot be paid out of company funds. The CoC needs to question the action of the Insolvency Professional and make him accountable for actions. This would enable better governance, enterprise value creation and hence better recoveries at reduced overall costs In conclusion, I would reiterate the spirit of maintaining or even enhancing enterprise value during the CIRP period through capacity build, trust and commitment. The regulatory changes that would also be required should more be in the nature of facilitation like allowing piecemeal sale of businesses, creditor discretion on avoidance applications, reduced court processes by cutting down adjudication only to disputes and not processes and a policy around interim finance to grow businesses. The key to success of Insolvency is to trust all its four pillars where breaches should be punished appropriately. <keyword id="152629" type="General" weightage="20" keywordseo="abizer-diwanji" source="Orion">Abizer Diwanji</keyword> is Head – Financial Services, EY India

OPINION: How to make India’s bankruptcy resolution process faster and more efficient

<ul><li>The structure of the <keyword id="6605010" type="General" weightage="20" keywordseo="bad-bank" source="Orion">bad bank</keyword> is different from the conventional ARCs wherein the management of the stressed asset and the purchaser of the asset is typically vested with the same entity.</li><li>While the initial loans being transferred will likely be fully written down loans, the price of acquisition by the <keyword id="3428228" type="General" weightage="20" keywordseo="narc" source="Orion">NARC</keyword> and the manner in which the price will be determined is unclear.</li><li>The sellers are banking on the liquidity of the <keyword id="2503334" type="General" weightage="20" keywordseo="security-receipts" source="Orion">security receipts</keyword>, which has a sovereign back stop and therefore betting on likely early realisation.</li></ul>The finance minister of India has announced the Sovereign Guarantee programme for the security receipts (SRs) issued by the National <keyword id="2290620" type="General" weightage="20" keywordseo="asset-reconstruction" source="Orion">Asset Reconstruction</keyword> Company (NARC). Effectively, the amount is approximately 18% of the initial ₹2 lakh crore of non-performing assets (NPAs), which will be transferred to the NARC, mostly by the public sector undertakings (PSUs). The structure of the NARC is different from the conventional ARCs wherein the management of the stressed asset and the purchaser of the asset is typically vested with the same entity. Here, the NARC is effectively a parking vehicle, which will have the licence to issue the SRs and the management of the outcomes of the loans – i.e. the recovery on the SR will be done by a separate asset management company (AMC). Presumably, the separate asset management company, which will be majority owned by the private sector will have appropriate talent and incentives to maximise the recovery on the SR. The objectives are noble and the sovereign guarantee (subject to certain conditions) is a big step to untangle this knotty problem. While the initial loans being transferred will likely be fully written down loans, the price of acquisition by the NARC and the manner in which the price will be determined is unclear. Assuming that greater clarity will emerge as we go along, the “India version” of a bad bank addresses several issues with pricing and resolution of such loans. The first and most important aspect of this is, it relieves the bankers of “fairness” of the price discovery process and potential post-facto actions, which is a genuine concern of bankers. A sale at a price quoted by NARC won't be questioned later. The sellers are banking on the liquidity of the security receipts, which has a sovereign back stop and therefore betting on likely early realisation. A consolidation of the consortium loans in one single decision point is the biggest plus point of the construct. This will reduce delays and friction in decision making with regard to the underlying assets. As the sovereign backstop comes with strings attached, it will spur greater urgency in resolution of such assets. These “controllable” factors, which were a pain point, have been addressed in the new “Bad Bank”; the challenge remains in the systemic issues. Any resolution of these assets would still have to rely upon the existing legal system and processes under IBC [Insolvency and Bankruptcy Code] or Sarfaesi [act]. As we have seen there has been inordinate delays even for admission of cases in National Company Law Tribunal (NCLT). Notwithstanding the recent Supreme Court admonition to stick to timelines, the NCLTs are not fully equipped to handle the case load. Often they are short staffed and have a frustrating lack of understanding of commercial implications of inordinate delays. It's up to the Govt also to address the issue of enough benches and adequate resources for quicker disposal of cases. The second issue is the requirement of additional capital or rescue financing for turning around assets. Earlier <keyword id="159495" type="General" weightage="20" keywordseo="arc" source="Orion">ARC</keyword>s were not permitted to provide additional capital to the defaulters. That does not change with the NARC. Banks were reluctant to provide funds as well if a company is in ARC. That is also unlikely to change. This is a challenge that the asset management company has to overcome. Finally, the optimism around liquidity of the “sovereign-backed” security has to be tempered with more than a pinch of salt. The conditionality and uncertainty on the outcome of the resolution plans will make price discovery very challenging for investors. ₹1.7 lakh crore of listed tradeable SRs will likely pose a new set of challenges to the Securities and Exchange Board of India (SEBI), with regard to what kind of disclosures should be made to market, who will make such disclosures etc. How will regulations regarding trading basis non public price sensitive information apply to such SRs etc. In order for good liquidity, the tax on income earned from security receipts is a grey area particularly for domestic investors and domestic pooled investments like alternative investment funds (AIFs). In fact as it stands it’s a gift to foreign investors! To the detriment of domestic investors. Any new idea will have to start somewhere, and this is a good start and the rest of the ecosystem will evolve in due course. Hopefully, this will get the banks to focus on credit growth and the NARC will create economic value through revival or recycling of capital as the case may be.

Opinion: The creation of a bad bank helps banks but not necessarily the bankrupt

<ul><li>The cabinet today approved a central government guarantee to the tune of up to ₹30,600 crore, wherein <keyword id="11291018" type="General" weightage="20" keywordseo="NARCL" source="Orion">NARCL</keyword> will buy bad loans from banks.</li><li>The government guarantee will be valid for a period of five years.</li><li>Banks have recovered ₹5.01 lakh crore of unpaid loans in the last six years, said <keyword id="6355261" type="General" weightage="20" keywordseo="finance-minister" source="Orion">finance minister</keyword> <keyword id="129243" type="General" weightage="20" keywordseo="nirmala-sitharaman" source="Orion">Nirmala Sitharaman</keyword>.</li></ul>The Union Cabinet has cleared a proposal to provide Rs 30,600 crore government guarantee for security receipts issued by the <keyword id="9209535" type="General" weightage="20" keywordseo="National-Asset-Reconstruction-Company" source="Orion">National Asset Reconstruction Company</keyword> (NARCL) as part of resolution of bad loans, Finance Minister Nirmala Sitharaman said on Thursday. The proposed <keyword id="6605010" type="General" weightage="20" keywordseo="bad-bank" source="Orion">bad bank</keyword> or NARCL will pay up to 15 per cent of the agreed value for the loans in cash and the remaining 85 per cent would be government-guaranteed security receipts. The government guarantee would be invoked if there is loss against the threshold value. Briefing reporters on the decision, she said banks have recovered Rs 5.01 lakh crore of unpaid loans in the last six years. Of this, Rs 3.1 lakh crore has been recovered since March 2018. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/sports/news/virat-kohli-has-decided-to-resign-as-captain-of-the-t20-cricket-after-the-t20-world-cup-2021/articleshow/86262216.cms">Virat Kohli to step down as India’s T20 captain, says he had ‘immense workload’ over the years</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/startups/news/byjus-acquires-us-based-coding-for-kids-startup-tynker/articleshow/86261427.cms">Byju’s acquires yet another coding-for-kids startup, this time an American one</a>

India's bad bank gets government nod — green lights NARCL with ₹30,600 crore guarantee

New Delhi, Banks have written off <keyword id="142154" type="General" weightage="20" keywordseo="bad-loans" source="Orion">bad loans</keyword> worth Rs 14.56 lakh crore in the last nine financial years starting 2014-15, Parliament was informed on Monday. Out of the total Rs 14,56,226 crore, written off loans of large industries and services stood at Rs 7,40,968 crore. Scheduled Commercial Banks (SCBs) have recovered an aggregate amount of Rs 2,04,668 crore in written-off loans, including corporate loans, since April, 2014 and up to March, 2023, Minister of State for Finance Bhagwat Karad said in a written reply to Lok Sabha. <keyword id="18310466" type="General" weightage="20" keywordseo="loans-written-off" source="Orion">Loans written-off</keyword> during the financial year, net of recovery in written-off loans during the financial year (net write-off) in public sector banks (PSBs) was Rs 1.18 lakh crore in the financial year (FY) 2017-18, which has declined to 0.91 lakh crore in FY 2021-22 and to Rs 0.84 lakh crore (RBI provisional data) in FY 2022-23, he said in another reply. Net write-off loans by private sector banks stood at Rs 73,803 crore (RBI provisional data) in FY 2022-23, he said. Net write-off as percentage of opening gross loans and advances in private sector banks was 1.25 per cent and 1.57 per cent in FY 2017-18 and FY 2022-23 respectively, and it was 2 per cent and 1.12 per cent for PSBs during the same period. Comprehensive steps have been taken by the government and RBI to recover and to bring down NPAs, enabled by which, gross NPAs of PSBs have declined to Rs 4.28 lakh crore as on March 31, 2023 from Rs 8.96 lakh crore as on March 31, 2018, he said. Talking about various steps taken by the government, he said, the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, has been amended to make it more effective. The pecuniary jurisdiction of debt recovery tribunals (DRTs) was increased from Rs 10 lakh to Rs 20 lakh to enable the DRTs to focus on high-value cases, resulting in higher recovery for the banks and financial institutions, the minister said. In addition, he said, National Asset Reconstruction Company Limited (NARCL) has been set up as an asset reconstruction company with an aim to resolve stressed assets above Rs 500 crore each. The government has also approved extending a guarantee of up to Rs 30,600 crore to back Security Receipts issued by NARCL to lending institutions for acquiring stressed loan assets, he said. Replying to another question, Karad said the board of State Bank of India (SBI) in its meeting held on June 9, 2023 had accorded approval for raising up to an amount of Rs 50,000 crore which constitutes basel III compliant AT-1 bonds up to an amount of Rs 20,000 crore, Tier-2 bonds up to an amount of Rs 10,000 crore and infrastructure bonds up to an amount of Rs 20,000 crore by the bank during FY2023-24. As per SBI, the purpose of raising capital bonds (AT-1 and Tier-2) is to replace the existing capital bonds which are due for call up during FY2023-24, further strengthen the capital base of the bank and support asset growth, he said. Banks are exempted from maintaining Cash Reserve Ratio and Statutory Liquidity Ratio on long-term bonds for lending to infrastructure sector, he said, adding, the raising of long-term infrastructure bonds helps the bank in better asset liability management. In a separate reply, he said, Pradhan Mantri Mudra Yojana (PMMY) was launched on April 8, 2015 and has been implemented across the country. As on June 30, 2023, he said, more than 42.20 crore loans amounting to Rs 24.34 lakh crore have been sanctioned to borrowers under the scheme.

Banks write off Rs 14.56 lakh crore NPAs in last nine financial years

With another round of bidding for <keyword id="6360090" type="General" weightage="100" keywordseo="reliance-capital" source="Orion">Reliance Capital</keyword> Ltd slated later this month, the question is whether the final value of the debt-laden company would be found and lenders will be able to realise their monies early or will the matter go to the apex court? Recently, the National Company Law Appellate Tribunal (NCLAT) ordered in favour of Reliance Capital lenders and allowed another round of auction for the financial services company. The lenders had approached NCLAT against an earlier order of the National Company Law Tribunal (NCLT) restraining the Committee of Creditors (<keyword id="230701" type="General" weightage="80" keywordseo="coc" source="Orion">CoC</keyword>) from extending the auction round to find higher value for the company. The initial bidding process ended on December 21, 2022 and Torrent Investments was found to be the highest bidder with Rs 8,640 crore. Soon after that, the Hinduja Group's <keyword id="1424679" type="General" weightage="80" keywordseo="iihl" source="Orion">IIHL</keyword> made an offer of Rs 9,000 crore. In its written submission before NCLAT, one of the members of CoC Vistra ITCL said: "NCLT has usurped the jurisdiction of the CoC by holding that the CoC has to vote on the Rs 8,640 crore plan of Torrent and Rs 8,110 crore plan of IIHL and that CoC has no jurisdiction to negotiate even on the figures." It further argued that NCLT has not even looked at these plans and there is no Rs 8,110 crore plan of IIHL and NCLT has substituted its opinion for that of CoC, which is not permissible under the Insolvency and Bankruptcy Code (IBC). The appellant submitted that Torrent Investments has, within a span of 24 days, increased the values of the bid from Rs 1,100 crore upfront to Rs 3,750 crore upfront and then further within 2 weeks from Rs 3,750 crore upfront to Rs 8,640 crore upfront, and the same was the case with IIHL. The appellant contended that CoC therefore clearly feels that there is more value to be discovered and the same cannot be interdicted by judicial intervention at this stage. In the next round of bidding, the minimum/reserve price will be Rs 8,000 crore cash upfront, then round one will be Rs 9,500 crore and then it will be Rs 10,000 crore and Rs 250 crore after each round, it is learnt. But the moot point is if Torrent Investments goes to the Supreme Court against the NCLAT order then there will be a legal delay in the resolution process and why would bidders participate if the matter is to be settled by the apex court. Incidentally, maximisation of the value for the stakeholders is the ground on which the IBC firmly rests. There are several examples of the success of COC's commercial wisdom and the ability to renegotiate to get a better deal for the stakeholders of a corporate debtor. For instance, in the case of DHFL which had a debt of Rs 88,000 crore, the first offer made by the Piramals to acquire was Rs 15,000 crore. But after negotiations/revision/fresh plans, the revised offer went up by Rs 22,250 crore to Rs 37,250 crore. In respect of the SREI debt (Rs 32,791 crore) resolution, the initial offer for the company was Rs 3,402 crore and National Asset Reconstruction Company Ltd (NARCL) while the value of the resolution plan after negotiation/revision/considering fresh plans the amount went up by Rs 11,465 crore to Rs 14,867 crore. The same is the case with a couple of other corporate debt resolution plans: Essar Power, the initial resolution plan value of ArcelorMittal was Rs 32,000 crore and was revised upwards by Rs 10,000 crore to Rs 42,000 crore. Bhushan Power and Steel - debt Rs 48,719 crore; first-round value was said to be Rs 15,000 crore and revised for about Rs 24,500 crore by JSW Steels; Binani Cement - debt Rs 7,500 crore; initial resolution plan value was Rs 6,932 crore and later went up to Rs 7,950 crore by Ultratech Cement; Bhushan Steel - debt Rs 59,207 crore; value of resolution plan after negotiation/revision/fresh plans Rs 35,200 crore plus 12 plus equity stake; Videocon - debt Rs 64,938 crore; first-round value about Rs 2,962 crore by <keyword id="15683960" type="General" weightage="50" keywordseo="twinstar-technologies" source="Orion">Twinstar Technologies</keyword>. After the CoC withdrew its approval of <keyword id="3244266" type="General" weightage="50" keywordseo="twinstar" source="Orion">Twinstar</keyword>'s plan, three Expressions of Interest for the company have been received, as per reports. Interestingly in the case of Reliance Capital with a debt of about Rs 25,500 crore, the value of the resolution plan after the first round was about Rs 2,591 crore. The resolution value went up to Rs 9,000 crore which was made by the Hinduja group's IIHL. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/india/news/for-many-years-after-independence-there-was-no-long-term-vision-in-health-sector-pm/articleshow/98444722.cms">For many years after Independence, there was no long term vision in health sector: PM</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/entertainment/news/amitabh-bachchan-injured-during-film-shoot-in-hyderabad/articleshow/98444560.cms">Amitabh Bachchan injured during film shoot in Hyderabad</a>

Will Reliance Capital lenders get their dues fast or will there be legal delays

<ul><li>The Indian stock markets could open on a positive note on September 17, with enough steam left in the bulls even now. </li><li>Trends on SGX <keyword id="6354813" type="General" weightage="20" keywordseo="nifty" source="Orion">Nifty</keyword> showed an increase of 89 points, suggesting that Nifty could open in the green despite mixed cues in other Asian markets. </li><li>Biocon, <keyword id="6357252" type="General" weightage="20" keywordseo="hero-motocorp" source="Orion">Hero MotoCorp</keyword>, TVS Motor and banks could be among the top stocks to watch out for on September 17. </li></ul><cmsannotation type="cmsannotation" annotationid="Biocon" comment="subhead" text="Biocon">Biocon</cmsannotation> Its subsidiary, Biocon Biologics, has entered into an agreement with Serum Institute of India to offer it a 15% stake in the company in exchange for 100 million vaccine doses per year for 15 years, and commercialisation rights for Serum Institute’s vaccine portfolio for the global market. <cmsannotation type="cmsannotation" annotationid="Hero MotoCorp" comment="subhead" text="Hero MotoCorp">Hero MotoCorp</cmsannotation> To increase prices of its scooters and bikes by up to ₹3,000 from September 20, to offset the increase in commodity prices. <cmsannotation type="cmsannotation" annotationid="TVS Motor" comment="subhead" text="TVS Motor">TVS Motor</cmsannotation> Acquired a majority stake in EGO Movement, a Swiss technology company with a portfolio of electric bikes, scooters and cargo bikes. <cmsannotation type="cmsannotation" annotationid="Banks" comment="subhead" text="Banks">Banks</cmsannotation> Finance Minister Nirmala Sitharaman announced a framework for India’s bad bank, guaranteeing up to ₹30,600 crore for security receipts. The National Asset Reconstruction Company will buy bad loans from banks by offering them 15% of the net asset value in cash, and the rest in the form of security receipts. <cmsannotation type="cmsannotation" annotationid="IPO Watch" comment="subhead" text="IPO Watch">IPO Watch</cmsannotation> Sansera Engineering IPO subscribed 11.47 times on the final day. Paras Defence announces IPO, offer opens on September 21. <cmsannotation type="cmsannotation" annotationid="Kotak Mahindra Bank" comment="subhead" text="Kotak Mahindra Bank">Kotak Mahindra Bank</cmsannotation> Acquired Volkswagen group’s vehicle loan arm, Volkswagen Finance, giving it access to 30,000 customers with a loan outstanding of ₹1,340 crore. <cmsannotation type="cmsannotation" annotationid="Infosys" comment="subhead" text="Infosys">Infosys</cmsannotation> Selected by Frost Bank, a Texas, US-based bank, to launch a new mortgage loan product. <cmsannotation type="cmsannotation" annotationid="JSW Steel" comment="subhead" text="JSW Steel">JSW Steel</cmsannotation> Raised $1 billion by way of bonds in the overseas market. SEE ALSO: <a href="https://www.businessinsider.in/finance/banks/news/indias-bad-bank-get-government-nod-green-lights-narcl-with-30600-crore-guarantee/articleshow/86262155.cms">India's bad bank gets government nod — green lights NARCL with ₹30,600 crore guarantee</a> <a href="https://www.businessinsider.in/business/telecom/news/airtel-vodafone-idea-and-jio-welcome-telecom-relief-package-but-analysts-are-divided-on-whether-it-is-enough/articleshow/86252002.cms">Airtel, Vodafone Idea and Jio welcome telecom relief package, but analysts are divided on whether it is enough</a> <a href="https://www.businessinsider.in/business/corporates/news/itc-surprises-investors-by-rallying-7-5-suddenly-today/articleshow/86255237.cms">ITC finally starts rallying, but Twitter can't stop trolling it</a>

Biocon, Hero MotoCorp, TVS Motor, banks and other top stocks to watch out for on September 17

<ul><li>White Oak Capital’s wholly owned subsidiary GPL Finance and Investments had acquired YES Asset Management Company last year.</li><li>On Thursday, the subsidiary received the nod from regulator <keyword id="35210" type="General" weightage="20" keywordseo="sebi" source="Orion">SEBI</keyword> to become the sponsor of YES MF.</li><li>With this, India will now have four new fund houses coming up soon -- Groww, Zerodha, Samco MF and White Oak Capital.</li></ul>Wealth management firm White Oak Capital has received approval from India’s market regulator to get started with the <keyword id="598742" type="General" weightage="20" keywordseo="mutual-fund-business" source="Orion">mutual fund business</keyword> after it acquired YES Mutual Fund (MF) last year. In September 2020, the investment management firm had bought YES MF from YES Bank, which was struggling with bad loans and raising fresh capital. The transaction will be completed in the next few weeks. GPL Finance and Investments, White Oak Capital’s wholly owned subsidiary, received Securities and Exchange Board of India’s nod to become the sponsor to the newly owned AMC. Sponsor can be seen as the promoter of the associate company. YES MF is the smallest amongst the 44 fund houses in the ₹36 trillion industry with ₹81.45 crore average assets under management (AUM) as of June quarter, according to the Association of Mutual Funds in India. Commenting on the development, <keyword id="1603586" type="General" weightage="20" keywordseo="prashant-khemka" source="Orion">Prashant Khemka</keyword>, founder at White Oak Capital said, “We have instituted a performance-first culture at our firm, earning the confidence of investors globally who have entrusted us with assets of over ₹40,000 crores in the past four years. We are excited about offering our investment expertise to retail investors across the country.” Khemka is the former chief investment officer (CIO) and lead portfolio manager at Goldman Sachs Asset Management. Aashish P Somaiyaa, who will be taking over as chief executive officer of the AMC said, “We continue to build a seasoned team of industry professionals to provide best in class investment products to retail investors. We will look forward to covering India well beyond the metro cities including B30 locations, to achieve higher inclusivity through omni-channel presence across physical, virtual and digital channels.” B30 cities include tier II and tier III cities. Last week, Samco MF, an online discount broker, announced its entry into the mutual fund business. With this, India will now have four new fund houses coming up soon -- Groww, Zerodha, Samco MF and White Oak Capital. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/startups/news/ipo-bound-pine-labs-raises-another-100-million/articleshow/86262592.cms">IPO-bound Pine Labs raises another $100 million</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/banks/news/indias-bad-bank-get-government-nod-green-lights-narcl-with-30600-crore-guarantee/articleshow/86262155.cms">India's bad bank get government nod — green lights NARCL with ₹30,600 crore guarantee</a>

Wealth management firm White Oak Capital gets SEBI’s nod to enter mutual fund business

<ul><li><keyword id="6355261" type="General" weightage="20" keywordseo="finance-minister" source="Orion">Finance minister</keyword> <keyword id="129243" type="General" weightage="20" keywordseo="nirmala-sitharaman" source="Orion">Nirmala Sitharaman</keyword> carried out an annual performance review of state-owned banks in Mumbai on August 25.</li><li>The policy pitched to increase the pension payout to <keyword id="6477319" type="General" weightage="20" keywordseo="bank-employees" source="Orion">bank employees</keyword>, which will allow them to get an even 30% of their pay.</li><li>The government may announce a new ruling to allow Indian companies to get a direct listing overseas in the union budget of February 2022.</li></ul>India’s Finance Minister Nirmala Sitharaman, who launched the <keyword id="11083891" type="General" weightage="20" keywordseo="ease-4-0" source="Orion">EASE 4.0</keyword> on Tuesday for institutionalising clean and smart <keyword id="6354778" type="General" weightage="20" keywordseo="banking" source="Orion">banking</keyword>, carried out an annual performance review of state-owned banks in Mumbai on Wednesday, August 25. EASE 4.0 is the fourth edition of the Indian government’s Enhanced Access and Service Excellence (EASE) policy launched in January 2018. The government aims to create a common reform agenda for public sector banks with this policy. These were the major highlights of the review — <ol><li> Bank employees’ pension payout has been increased to 30% of last-drawn salary and can go up to ₹35,000.</li><li>Employee contribution to pension corpus is now up to 14%. Currently banks contribute only 10%.</li><li>Public sector banks have reached out to the Reserve Bank of India (RBI) this week for a bad bank license.</li><li>The government would have a presence in life insurance, general insurance and reinsurance.</li><li>Government has reduced duties on several products on edible oils to keep inflation in check.</li><li>The government may announce a new ruling to allow Indian companies to get directly listed overseas, in the union budget of February 2022.</li><li>Banks are asked to make specific plans for the organic fruit sector of North East, Bengal, and Odisha.</li><li>The union government estimates that the inflation will remain within 4-6% bands.</li><li>Sitharaman also said that it’s too early to comment on whether credit is picking up or not.</li><li>Public sector banks have reported a profit of ₹31,817 crore, after a five-year loss-making streak.</li><li>Non-performing assets (NPAs) are down by ₹62,000 crore in the last one year to ₹6.16 Lakh crore.</li><li>Cases of fraud have decreased to 2,903 in the financial year 2020-2021.</li></ol>The report also noted that public sector banks have approached the Reserve Bank of India (RBI) this week to get a licence for National Asset Reconstruction Company Ltd (NARCL) or bad banks, which will buy <keyword id="142154" type="General" weightage="20" keywordseo="bad-loans" source="Orion">bad loans</keyword> of other lenders and financial institutions. The proposal to offer guarantees on bad loans is also under consideration. SEE ALSO <a href="https://www.businessinsider.in/business/startups/news/ipo-bound-delhivery-buys-another-logistics-company-to-strengthen-its-business-offering/articleshow/85618994.cms">IPO-bound Delhivery buys another logistics company to strengthen its business offering</a> <a href="https://www.businessinsider.in/stock-market/news/zerodha-founder-shares-lessons-from-disappointing-listings-of-cartrade-aptus-chemplast-and-nuvoco-vistas-ipo/articleshow/85614310.cms">Cut the price or wait a bit ⁠— what the market is telling IPO aspirants</a>

More pension for bank employees to overseas listing roadmap — these are the highlights from Finance Minister Nirmala Sitharaman's EASE 4.0 address

<ul class="p-rich_text_list p-rich_text_list__bullet"><li>Most <keyword id="260273" type="General" weightage="20" keywordseo="srei-group" source="Orion">Srei Group</keyword>’s lenders have either already recognised it as a non-performing account, or are planning to do so over the next three months.</li><li>Some of the biggest lenders to the group that is known for funding infrastructure projects include <keyword id="49007" type="General" weightage="20" keywordseo="uco-bank" source="Orion">UCO Bank</keyword>, <keyword id="6357132" type="General" weightage="20" keywordseo="canara-bank" source="Orion">Canara Bank</keyword>, Bank of India and <keyword id="6355975" type="General" weightage="20" keywordseo="axis-bank" source="Orion">Axis Bank</keyword>, among other public sector and private banks.</li><li>Srei told Business Insider that the amount due to its lenders is ₹28,000 crore (about $4 billion).</li></ul>Kolkata-based Srei Group that runs non-bank lender <keyword id="3187701" type="General" weightage="20" keywordseo="srei-equipment-finance-ltd" source="Orion">Srei Equipment Finance Ltd</keyword>., among other entities, has run into more trouble as its lenders have either already classified or are planning to recognise its borrowings as non-performing. Some of the biggest lenders to the group that is known for funding infrastructure projects include UCO Bank, Canara Bank, Bank of India and Axis Bank, among other banks, said two people aware of the development, who spoke to Business Insider requesting anonymity. The persons cited above said that the group owes ₹30,000 crore, whereas the company, which disputed the figure, told Business Insider that the amount due to the lenders is ₹28,000 crore (about $4 billion). “The company’s total liabilities are around ₹18,000 crore of bank loans and another ₹10,000 crore of external commercial borrowings and bonds. However, realizable assets, including arbitration awards, are higher. Therefore, we believe we can pay all our creditors over a period of time if structured in line with cash flows,” said a company spokesperson in an email reply to Business Insider’s queries. Loans given to Srei Group, according to the first of the two people cited above, who is a senior executive at one of the lenders to the group, have already been tagged as non-performing. The bank, he said, has been waiting for a go-ahead from the banking regulator on further action. The restructuring option proposed by the Group, the executive said, would allow lenders to recover just 30% of their dues over a nine-year period, even if a moratorium was to be offered initially. As no sustainable recovery options emerged, he said, it felt prudent to recognise Srei’s loans as NPA. The second of the two people cited above, who is also an official at one of the banks that had lent to Srei, told Business Insider that it was in the process of recognising Srei’s loans as non-performing over the next three months, as no resolution plan has been agreed upon between Srei and its creditors. <div type="javascript" title="Custom" contenttype="Image"><cdata><![CDATA[<div class="flourish-embed flourish-table" data-src="visualisation/7315356"></div>]]></cdata></div> <cmsannotation type="cmsannotation" annotationid="Recovery efforts at Srei Group" comment="subhead" text="Recovery efforts at Srei Group">Recovery efforts at Srei Group</cmsannotation> In October 2019, Srei had transferred all the assets and liabilities of Srei Infrastructure Finance Ltd. to its wholly-owned subsidiary Srei Equipment Finance Ltd. via a slump exchange. The business transfer agreement, the company said, was executed after getting approvals from its shareholders, debenture trustees, few lenders, stock exchanges and an in-principle approval from some of the domestic lenders including lead banks. But the company's already stressed balance sheet suffered a major blow during the pandemic, further impairing its ability to repay dues. "Owing to the Covid-19 pandemic, including the second wave followed by extended lockdown from time to time and the moratorium, collection from borrowers and the lessees were severely impacted. In addition, it adversely affected the company’s liquidity during the year resulting in a cash flow mismatch as NBFCs like Srei Equipment Finance Ltd. were not allowed any similar moratorium by banks and financial institutions," Srei said in its emailed response. <div type="javascript" title="CardEmbed" contenttype="Image"><cdata><![CDATA[<div class="flourish-embed flourish-chart" data-src="visualisation/7315676"></div>]]></cdata></div> Later, in Oct. 2020, Srei Equipment Finance approached the Kolkata bench of the National Company Law Tribunal for debt realignment and seeking creditor approval on its business transfer agreement. The restructuring options proposed by the group, however, did not get a go-ahead from all its creditors. "To pay back its lenders in a structured and orderly manner, the company submitted a scheme in October 2020 for paying back principal and interest over time to banks and financial institutions. The company also offered the option of modifying the proposed repayment schedule to be suggested by the creditors," the company said in the emailed reply. While a section of creditors agreed to the respective schemes that proposed payment over time, a few others, including banks, are yet to agree or offer Srei a modified repayment schedule on how they would like to be paid over time, it said. Even as Srei remains in discussion with its creditors, it said in July that the group had got term sheets from Singapore's Makara Capital Partners for an investment of ₹2,200 crore, and from US-based Arena Investors for investment of ₹2,000 crore. On Sep. 10, the group also sold one of its subsidiaries, Trinity Alternative Investment Managers Ltd. for ₹1.32 crore. But talks of a potential investment or the debt restructuring options offered by Srei have failed to strike a chord with its creditors. Lenders don’t want to give any leeway and so, the incoming bad bank may be an option As of March this year, an escrow account with Srei’s lead banker UCO Bank had collected ₹1,568 crore, as per its latest annual <a href="https://www.bseindia.com/xml-data/corpfiling/AttachHis/7fe5e539-f9d1-4625-9741-ca7e60a89014.pdf">report</a>. The Trust and Retention Account (TRA) allows Srei’s lenders to control all its cash flows, including business and operational payments. “Nevertheless, banks are already controlling the company’s cash flows since November 2020, and substantial collections have happened. It has enabled the bankers to distribute the money among themselves. At present, a payment schedule from them is awaited in view of the modification to the scheme submitted to the Honorable Tribunal,” it said. <div type="javascript" title="Custom" contenttype="Image"><cdata><![CDATA[<div class="flourish-embed flourish-chart" data-src="visualisation/7315489"></div>]]></cdata></div> But debt resolution remains elusive as Srei continues to suffer a severe cash crunch. As of June 30, the group’s net worth had fully eroded and it was not able to comply with various regulatory ratios/limits, it said in a stock exchange filing on Aug. 14. “All this may have an impact on the Group's ability to continue its operations in normal course in future and to meet its financial commitments as and when due,” it said. Besides, an inspection by the Reserve Bank of India on Srei Infrastructure Finance and Srei Equipment Finance in March last year showed loans being potentially extended to related companies. The group’s total exposure to such borrowers, it said, is ₹7,961 crores as on June 30, 2021. Based on Srei’s current state of affairs, said Jignesh Shial, head of Banking, financial services and insurance sector at InCred Capital, it makes more sense for lenders to recognise it as NPA on their books, and then the RBI could take charge of its resolution. “It is possible that the lenders may want to sell down Srei's bad loans assets to the National Asset Reconstruction Company Ltd. at a later stage, but even that option is not immediately available,” he said. On Sep. 16, the central government cleared a proposal to provide ₹30,600 crore government guarantee for security receipts issued by the National Asset Reconstruction Company (NARCL), as part of resolution of bad loans. NARCL, or the proposed bad bank, is an asset reconstruction company set up by Indian banks to help them consolidate and take over existing stressed assets for their subsequent resolution. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/sbi-cards-is-down-as-carlyle-dumps-shares-but-the-credit-cards-business-is-bouncing-back/articleshow/86390713.cms">SBI Cards is down as Carlyle dumps shares but the credit cards business is bouncing back</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/india-to-canada-travel-open-check-out-covid-19-rules-and-air-ticket-price/articleshow/86390653.cms">Air Canada, Emirates, Air India and other airlines resume flights to Toronto and the tickets are priced up to ₹5 lakh</a>

You Searched For "NARCL" and got 10 results

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Biocon, Hero MotoCorp, TVS Motor, banks and other top stocks to watch out for on September 17

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More pension for bank employees to overseas listing roadmap — these are the highlights from Finance Minister Nirmala Sitharaman's EASE 4.0 address

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