Banking and Finance

As a part of its ongoing endeavour to reduce compliance burden on regulated entities by, inter alia, removing redundant and repetitive filings and instructions, the Reserve Bank of India (RBI) on 9 June 2022 notified that authorised dealer category I banks (AD Banks) will not be required to file returns for guarantees availed and invoked from non-resident entities, with effect from the quarter ending June 2022.

The Insolvency and Bankruptcy Board of India (the Board) vide its circular no.

Recently, by a judgment dated 30 May 2022, a three-judge bench of the Supreme Court in the case of Kotak Mahindra Bank Limited versus A. Balakrishnan & Anr (Judgment dated 30 May 2022 in Civil Appeal No. 689 of 2021) held that a recovery certificate issued the Recovery of Debts and Bankruptcy Act, 1992 (RDB Act) would qualify as a “financial debt” under the Insolvency and Bankruptcy Code, 2016 (IBC), and give rise to a fresh cause of action under section 7 of the IBC. 

In the recent judgement of PTC India Financial Services Limited v Venkateswarlu Kari and Anr, Civil Appeal No. 5443 of 2019, the Supreme Court provided clarity to the creation and enforcement of pledged securities in dematerialised form.

In addition to providing for a mechanism for resolution of stressed assets, the Insolvency and Bankruptcy Code, 2016 (IBC) also provides for a framework whereby a corporate person who is not under any financial stress may also voluntarily undergo liquidation to wind up its affairs.