Category Archives: Banking

Beginners’ Guide to Enforcement of Security Interest under SARFAESI Act

The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) enable Banks and Financial Institutions(FIs) to recover defaulted loan from borrowers by adopting measures for recovery or reconstruction. The SARFAESI Act provides three alternative … Continue reading

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S4A or Scheme for Sustainable Structuring of Stressed Assets

Background The Reserve Bank of India (RBI) in its efforts to strengthen the lenders’ ability to deal with stressed assets, has been issuing, from time to time, guidelines and prudential norms on stressed assets for resolution by lenders. Towards the … Continue reading

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Highlights of the proposed amendments to RDDBFI Act & SARFAESI Act

To read a detailed article on the amendments, click: Know all about the changes made by Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Act, 2016. Background The Recovery of Debts due to Banks and Financial … Continue reading

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A brief introduction to the Insolvency and Bankruptcy Code

The Insolvency and Bankruptcy Code1 (Insolvency Code) was introduced in the Parliament in December 2015 and was referred to the Joint Committee of Parliament. The Committee has submitted its report on 28th April 2016 (read the summary of the Joint Committee Report … Continue reading

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Bank Guarantee- Invocation and grant of injunction by Courts

Bank Guarantee Bank guarantee is the backbone of commercial transactions.  It is said that business proceeds on beliefs or judgment of probabilities and not on certainities.  Thus when a commitment is made it must be honoured, otherwise people will lose … Continue reading

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Corporate Debt Restructuring Mechanism-Explained

Corporate Debt Restructuring (CDR) Mechanism was evolved by Reserve Bank of India (RBI), and detailed guidelines were first issued in 2001 for implementation by banks. The CDR Mechanism covers only multiple banking accounts, syndication/ consortium accounts, where all banks and … Continue reading

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Strategic Debt Restructuring Mechanism and Joint Lenders’ Forum

Background The Reserve Bank of India (RBI) in its circular dated 26th February 2014, on Framework for Revitalising Distressed Assets in the Economy–Guidelines on Joint Lenders’ Forum (JLF) and Corrective Action Plan, envisaged change of management as a part of … Continue reading

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Wilful Defaulters and Non-Cooperative Borrowers

Background The Central Vigilance Commission had, in the year, 1998 directed Reserve Bank of India (RBI) to collect information on wilful defaults of loans of Rs.25 lakhs and above and disseminate it to the reporting Banks and FIs. Pursuant to … Continue reading

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Mortgages-Simplified

What is a mortgage? A mortgage is the transfer of an interest in an immovable property for the purpose of securing the payment of loan advanced or to be advanced or the performance of an engagement which may give rise … Continue reading

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Debt recovery laws-DRT Act and SARFAESI Act

Background After liberalisation of the Indian economy in 1991, Banks and Financial Institutions (FIs) have been experiencing considerable difficulties in recovering loans and enforcement of securities charged with them. The procedure for recovery of debts due to the banks and … Continue reading

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