- PROJECT SASHAKT”—BANKS GIVE SHAPE TO INTER-CREDITOR PACT FOR BAD DEBTS: Banks have finalised an inter-creditor agreement and are working on details of an Asset Management Company as part of Five-pronged mechanism they have identified to resolve the mounting issue of Non-Performing Assets under “ Project-Sashakt”. Under “Project Sashakt”, financial institutions will enter into an inter-creditor agreement to authorise the lead bank to implement a resolution within 180 days. The agreement is the base for the Bank-Led Resolution Approach (BLRA) for loans between Rs. 50 – 500 crores. The inter-creditor agreement will be a legal document and enforceable in any court of law.
- RBI REGULATIONS ON AUDITORS PUT BANKS IN A SPOT: Reserve Bank of India has come out with a framework for statutory auditors and has issued certain regulations around auditors and in case of errant auditors, they can be barred from auditing. Now several banks and NBFCs have approached PwC and other big audit firms seeking clarity on likely implications of a clause that could bar audit firms accused of irregularities from servicing financial institutions.
- SBI CARD LAUNCHES ARTIFICIAL INTELLIGENCE POWERED VIRTUAL ASSISTANT ELECTRONIC LIVE ASSISTANT: SBI cards, the country’s second largest credit card issuer has announced the launch of “ELA” (Electronic Live Assistant), a virtual assistant for customer support and services. Driven by Artificial intelligence and Machine Learning, ELA is designed to enhance customer experience by providing relevant and instant responses to customer queries.
- RBI GRANTS LICENCE TO BANK OF CHINA TO SET UP BRANCHES IN INDIA: The Reserve Bank of India has issued licence to Bank of China to launch operations in India. Bank of China is one of the very few state owned commercial banks in China. India and China are focussing on expanding their economic ties notwithstanding differences on several sticky issues.
- UNSECURED BANK LOANS RISE FOUR –TIMES IN LAST THREE YEARS: Banks’ unsecured loan book has grown four times in the bank credit during the past three years, helped by a rise in discretionary spending, technology-driven disbursements and lower interest rates. Between 2015 and 2018, unsecured credit, comprising of personal, MSME and credit card loans have grown on a compounded annual growth rate of nearly 27% which is almost four times growth in bank credit.
- PSU BANKS TO SET UP AMCs FOR LOAN RESOLUTION: Public Sector Banks will take lead in setting up an Asset Management Company (AMC) for resolution of loans above Rs. 500 crore as part of further efforts aimed at rescuing bad assets and restoring lenders to health so that they can focus on further credit growth to push forward India’s ongoing economic recovery. The initiative will be run by the banks without any government support, will be in harmony with all current laws and will function as an additional supporting element to the Insolvency and Bankruptcy Code (IBC) process.
- COMPANY DIRECTORS’ TO FURNISH PERSONAL NUMBERS FOR VERIFICATION: In a significant move, the Corporate Affairs Ministry has decided to carry out KYC (Know Your Customer) process for all Directors of a Company, including those who have been disqualified. The Directors will have to share their personal mobile numbers and E-mail ids with the government as part of verifying their credentials, amid continuing efforts to weed out shell companies.