Tag: restructuring

Monetary policy has space but will be used prudently, says RBI Governor Shaktikanta Das

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The RBI has room to reduce interest rates, but it will do so prudently and judicially,  the central bank Governor Shaktikanta Das said in an interview to CNBC-TV18 Awaaz.

He said an RBI panel would review the performance of the monetary policy committee (MPC) and the effectiveness of their decisions in managing the inflation target.

On the loan restructuring scheme, Das said the framework for resolving COVID-hit loans had been taken with great thought. He said RBI had considered the interests of banks, depositors and businesses.

Businesses were facing a lot of stress, and their failure would lead to loss of jobs. To minimize job losses and ensure that banks were repaid, it was important that the businesses were saved,  he said.

Within the resolution framework, banks could decide on which borrowers deserved to be given a helping hand, he said. 

Das said the real estate sector should be a key beneficiary of the loan restructuring scheme, though it was tough to say how many of the loans would be restructured.

On privatisation of public sector banks, Das said it was for the government to decide. He said the RBI will take a view on privatisation of PSU bBanks only if its views are sought.

RBI has formed an internal working group to review ownership of private banks, and will take a view on the issue after the final report is submitted in September, Das said.

On the cap on CEO tenure at private banks, Das said the RBI would examine all suggestions and take a view.

He said the macro environment was too uncertain to give a clear GDP forecast.  The RBI has already given guidance that growth would be negative in FY21, and it would start giving estimates once there was more clarity, he said.

On rate cuts, Das said the RBI was ready with both conventional and unconventional steps.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

HDFC’s Keki Mistry: RBI’s one-time loan restructuring was necessary given COVID-19 impact

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Reserve Bank of India (RBI) has done a commendable job in maintaining the liquidity in the system, said HDFC chief executive officer (CEO) Keki Mistry, while also adding that he doesn’t see interest rates coming down in the short-term. Mistry further said that RBI’s one-time restructuring was necessary given how many industries were affected by the COVID-19.

Speaking to CNBC-TV18, Mistry also talked about HDFC successfully raising Rs 10,000 crore via equity issuance as well as raising just over Rs 300 crore upfront via a warrant issue. In addition to RBI, liquidity and interest rates, Mistry also shared his views about demand outlook in the future and other issues.

In terms of liquidity, he said, “Reserve Bank of India (RBI) has done a very commendable job in terms of maintaining liquidity in the system. There was a lot of tightness in liquidity in the latter part of March and early April but since then RBI has been very liberal in terms of ensuring that there is enough liquidity in the market and the liquidity reaches even the weaker segments of the markets. So hats off to RBI, it is a great job. My sense is liquidity will remain more or less at these levels, I don’t see interest rates coming down very sharply in the short-term at least because we have some fear of inflationary pickup and there is adequate liquidity in the system. So my sense is these rates will remain at these levels at least for some time.”

When asked about one-time restructuring, he replied, “Restructuring was necessary not just for real estate because there are so many industries that have been impacted because of COVID – hotels, airlines, hospitality and of course real estate. So when RBI permitted the moratorium, they said the moratorium will be allowed for all loans that were standard on March 1. If the restructuring was also done along similar lines that is all loans that were standard as of March 1 then I think that would go a long way in benefiting every segment of the market.”

On personal loans, he further mentioned, “I am not very sure that you would need to do any massive amount of restructuring on personal loans. Let us wait and see, I guess you will have to do it case-by-case, you cannot apply the same yardstick for every single loan.”

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

RBI must consider one-time restructuring for realty loans, says Deepak Parekh

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The real estate sector has been struggling and Finance Minister Nirmala Sitharaman said on Tuesday that the government and Reserve Bank are working to resolve the issues being faced by the ailing sector The Nifty Realty index surged nearly three percent in intra-day trade on Wednesday on the back of this statement.

Lending his voice to the revival talk, chairman of Housing Development Finance Corporation, Deepak Parekh has said that the RBI could consider a one-time restructuring for realty loans. He said that RBI waging a long and successful battle for transparency in asset quality was appreciated but added that these are unusual times.

Parekh was speaking at the India Mortgage Leadership Conclave 2019. He argued that restructuring would enable last-mile funding and ensure these projects are completed.

The HDFC chairman also spoke about subvention schemes. He admitted that misuse of subvention schemes by some has hurt the sector. However, he cautioned, “Not all subvention schemes are being misused.”

ALSO READ: Nifty Realty gains as FM Nirmala Sitharaman hints at more sops for housing sector

Parekh also appreciated the government Rs 20,000 crore fund to help real estate developers complete projects that are stuck on account of last-mile cash shortage. He said, “Rs 20,000 crore realty fund will be of great help to the sector.”

Parekh also batted for REITs and said that he saw it emerging as a preferred alternative investment avenue. He said that 3-4 other developers were planning their REITs in the next few months.

ALSO READ: Real estate sector’s recovery only a matter of time, says CLSA

“Our institutions like insurance companies and mutual funds were wary of investing in REITs. It was the first REIT. However, they managed to get oversubscription and the REIT is trading at very good prices. So I am sure that in the second REIT, which is round the corner, I am sure the Indian institutions like our insurance and asset management should look at investment.”

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

TVS Group looking to restructure ownership, says report

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The TVS Group is looking at a possible restructuring of ownership among the various members of the family, reported The Economic Times.

The family-run group has initiated consultations aimed at restructuring the $8 billion conglomerate, the report said citing several unnamed people with knowledge of the matter.

According to the report, the exercise is aimed at unravelling the intricate shareholding network that has evolved since its launch in 1911 by Thirukkurungudi Vengaram Sundram Iyengar.

As per the report, Investment bank JM Financial, consulting company EY and leading law firms have been hired to ensure that the process is carried out in a smooth manner.

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Know your rights in case debt collectors knock at your door over defaulted home loan

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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In 2016, Jayesh Mathur residing in Delhi purchased a home by taking a loan from PSU bank. At that time he had over-stretched his financial capability while buying this property. Nowadays, with ease of getting loans from banks, housing finance companies and NBFCs there are several millennial like Mathur who opt to purchase a home at start of their professional life.

They enjoy to the fullest while paying partly through EMIs. However, with other prior financial commitments towards his family and rising children education expenses he started defaulting on home loan EMIs from following year. This led to face-off with debt collectors (recovery agents) from bank at his door step very often.

Impact of defaulting on home loan EMIs

Amit Wadhwani, Co-founder, Sai Estate Consultants said, “If the default continues for six months, banks give the borrower a two month grace period to regularise the repayment. Failure to do so will result in banks declaring the loan a non-performing asset (NPA).” Bank can auction the property/collateral to recover its debt and reduce their NPAs.

Banks are primarily interested in getting their money back than in taking legal recourse. A legal recourse involves auctioning a house which is time consuming. Hence, banks follow up the matter with the borrower through debt collectors for at least six months before taking any legal action on property.

Rights of borrowers while face-off with debt collectors on default of home loan EMIs

i. Right to check the identity
With increasing number of frauds roaming around in the city, borrowers are provided with the right to ask and check the ID cards of recovery agents as issued by banks and NBFCs before starting with the conversation about pending dues.

ii. Right to privacy
As per this right, agents can’t share or discuss the issue of your impending debts with other people. Rachit Chawla, Founder and CEO, Finway said, “If you found them doing so, you can file a complaint against him with banks and NBFCs and can even take a legal action.”

iii. Right to humane treatment
Chawla explained, “According to this, recovery agents need to be decent and civilized in their approach. Respecting your personal space, the recovery agents are clearly directed to contact the borrowers between 7 am and 7 pm.” On violation, borrowers are free to take legal action supported with all the valid proofs.

Things that should be legally pursued by the borrower on default of home loan EMIs

i. Approach your lending bank on default of loan
Inform your bank about the current financial situation, this will act as a proof for the recovery agent to know the borrower well.

ii. Apply for restructuring of home loan
The borrower has an option to restructure his loan when there is a financial crunch. Wadhwani said, “In many cases the banks offer the borrower a flexible and easy option to repay the home loan while restructuring.” After checking the restructured proposal from bank and understanding details the borrower can then decide to accept it and continue to repay outstanding loan instead of defaulting.

iii. One time settlement
The borrower can be in a dreadful situation when he cannot pay any amount to the bank or NBFC. Wadhwani suggested, “You can settle the loan via a small payment where up to 90% of the principal and 100% interest amount is waived off.” However, in this case if the borrower has accepted to do so, the credit report will reflect the fact that you could not repay the loan amount completely and it was settled with one time payment. This will henceforth, affect your credit score while borrowing.

Source: MoneyControl.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Tata Motors plans to sell off lending arm, says report

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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JLR changed its dividend policy from a fixed amount of 150 million pounds to 20% of the profit after tax (PAT) in fiscal 2018 and 25% in the subsequent year. This is in line with the 25-40% dividend paying policy of global auto majors, the report said.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow