By Saurabh Sharma and Harshit Dusad External Commercial Borrowings (“ECBs”) have been one of the primary instruments for Indian corporate entities, to source their financial needs. ECBs are essentially commercial loans in the form of bank loans, buyers’ credit, suppliers’ credit, etc., which is regularly availed by a resident Indian borrower from offshore / non-resident lenders. Since November 2015, India has witnessed revolutionary changes in the framework for ECBs. One such milestone step was the introduction of External Commercial Borrowings (ECB) Policy – Revised framework on 30th November 2015, and consequently a new Master Direction on External Commercial Borrowings, Trade […]

By Nikita Chawla and Aashka Shah One more step towards ease of doing business in India, is the Reserve Bank of India’s (“RBI”) circular of 21st March 2017 (“Circular”), whichallows multinational companies (“MNCs”) to access the Indian derivatives market on behalf of their Indian subsidiaries (“Subsidiaries”). The Circular provides operational flexibility to MNCs and their Subsidiaries in relation to the exposures of the Subsidiaries to currency risks arising out of current account transactions in the country. In order to promote greater cohesion with their central treasuries, representations have been made in the past to the RBI to permit MNCs to […]

By Shashank Prabhakar The Supreme Court’s decision in IDBI Trusteeship Services Limited v. Hubtown Ltd., has provided much needed relief for the foreign investor community. Whilst the decision is a landmark for laying down the law on procedure to be followed in summary suits, the court’s observation on the issues involving FEMA regulations and the FDI policy is no less important. The facts are that FMO, a foreign investor, subscribed to 10% equity and 3 Compulsory Convertible Debenture (“CCDs”) in Vinca (an Indian company) for a sum of Rs. 418 crores. The rest of Vinca’s equity was owned by Hubtown, […]

INTRODUCTION A Division bench of High Court of Delhi (“the Court”) in Ardee Infrastructure Pvt. Ltd. v. Ms. Anuradha Bhatia & Ors1 while adjudicating upon the controversy with regard to application of the Arbitration and Conciliation (Amendment) Act, 2015 (“the Amending Act”) with effect from October 23, 2015, to Arbitration and Conciliation Act, 1996 (“the Act”) held that the right to have an award enforced or not is an accrued right and ‘the amended provisions would apply, if they are merely procedural and do not affect any Accrued right(s). ISSUE(S) The Court in the captioned matter was specifically dealing with […]

Apurva Kanvinde and Abhinav Surana The Government’s attempt to replace the five decade old Companies Act, 1956 was accomplished in 2013 with the notification of the Companies Act, 2013 (“2013 Act”). The 2013 Act brought about sweeping changes in the Indian company law. It increased liabilities for directors and key managerial personnel, prescribed stricter norms for unlisted companies and introduced higher thresholds for corporate governance. One of the major changes brought about by the 2013 Act was the increase in the regulations of the unlisted companies vis-à-vis compliance with corporate governance norms. Until the 2013 Act came into force only […]

Apurva Kanvinde and Arunabh Choudhary The Securities and Exchange Board of India (“SEBI”) has on 4th January, 2016 amended the SEBI (Alternative Investment Fund) Regulations, 2012 (“AIF Regulations”) in order to boost angel fund investment in start-ups. The amendments to the AIF Regulations were approved in the SEBI Board meeting held in November, 2016. Angel funds are a sub-category of venture capital funds that raise funds to invest in start-ups. The AIF Regulations contain a separate chapter for angel funds. Due to the high risk involved, the AIF Regulations stipulate specific conditions applicable to angel funds that are not applicable […]

Harini Subramani & Adil Ladha In September this year, VP Joy, the Central PF Commissioner spoke about ongoing attempts to link the Aadhaar with the Universal Account Numbers (UAN) of all employees covered under the Employees’ Provident Funds and Miscellaneous Provisions Act of 1952 in order to facilitate “faster transactions” for the benefit of employees. He had indicated that the linking/seeding exercise was being undertaken in order for the online services to be effective by March 31 next year, a deadline which appears to contradict the timeline stated in a recent letter dated November 21, 2016 [pdf] issued by the Employees’ Provident […]

Nikita Chawla  and Sameer Bindra One of the biggest issues that continues to stress the banking sector as of date is the mounting number of non performing assets. The federal legislation enacted in 2002, the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI Act”) has been in force for more than a decade. It was enacted with the intent to help financial markets improve recovery by exercising self-help powers to take possession of and enforce collateral. In other words, to reduce non-performing assets by adopting measures for recovery. Some of the impediments in enforcing […]

The Insolvency and Bankruptcy Code, 2016 (the “Insolvency Code, 2016“) had received the assent of the President of India on May 28, 2016. Since then, there have been discussions among the stakeholders with respect to its implementation and its repercussions on the interested parties, including corporates and individuals. There have been certain material developments around the Insolvency Code, 2016 in last few days wherein the major provisions relating to the Insolvency Code, 2016 have been brought into force. To start with, the provisions relating to the setting up of the Insolvency Professional Agencies (“IPA“) and Insolvency Professional (“IP“) got notified. […]

As part of its ongoing putsch against stress in the banking system, the Reserve Bank of India (RBI) issued guidelines on sale of stressed assets by banks on 1 September. The guidelines continue the RBI’s various efforts since 2014 to put in place a regulatory framework to identify and tackle stress in the banking system before loans are classified as non-performing assets (NPAs), and clean up banks’ balance sheets. The guidelines are detailed and cover a vast swathe including when stressed assets should be sold, valuation, investment in security receipts by selling banks, and mode of sale (including a right […]