Banking and Finance

It has been more than a month since the announcement of the lock-down in India by the Central Government, and longer in many other parts of the world.

In the judgement V. Padmakumar v Stressed Assets Stabilisation Fund (Respondent) & Anr (12 March 2020, Company Appeal (AT) (Insolvency) No 57 of 2020), a four member bench of the National Company Law Appellate Tribunal (NCLAT) has, inter alia, held that entries in the balance sheet of the company do not constitute an acknowledgement of liability in terms of Section 18 of the Limitation Act, 1963 (Limitation Act). This is for the purpose of filing an application for initiation of the corporate insolvency resolution process (CIRP) under the Insolvency and Bankruptcy Code, 2016 (IBC).

The Government of India (GOI) announced a nationwide lock down on account of Covid-19 pandemic with effect from 25 March 2020. This has severely disrupted regular business activities across all sectors of the economy in the country.

The Reserve Bank of India (RBI) on 17 April 2020 introduced additional regulatory measures to alleviate the impact of COVID-19 pandemic on the Indian economy with a focus primarily on the lending institutions. The additional measures are consistent with the global coordinated action committed to by the Basel Committee on Banking Supervision. RBI’s earlier COVID-19 – Regulatory Package dated 27 March 2020 (Regulatory Package) was focused on steps to mitigate the burden of debt servicing on the borrowers and to ensure business continuity for viable enterprises.

The Hon’ble High Court of Rajasthan (Rajasthan HC) delivered its judgment in the matter of Ultra Tech Nathdwara Cement Ltd v Union of India through the Joint Secretary, Department of Revenue, Ministry of Finance and Ors D.B. Civil Writ Petition No.

The Reserve Bank of India (RBI) as part of its Statement of Development and Regulatory Policies released on 27 March 2020 announced a slew of measures to safeguard the Indian economy from the shocks of the COVID-19 pandemic. As part of these measures, the RBI released a circular (Ref: RBI/2019-20/ 186 DOR.No.BP.BC.47/21.04.048/2019-20) on COVID-19 – Regulatory Package (COVID Regulatory Package) to, inter alia, mitigate the burden of debt servicing brought about by disruptions on account of COVID-19 pandemic and to ensure business continuity for viable enterprises.

Amidst the outbreak of COVID 19, the Securities and Exchange Board of India (SEBI) had previously extended the compliance timelines prescribed under Regulations 7(3) ( Submission of compliance certificate signed by share transfer agent), 13(3) (Grievance Redressal Mechanism), 24A (Secretarial Audit), 27(2) (Corporate Governance Compliance Report), 31 (Shareholding pattern disclosure) and 33 (Financial Results) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR Regulations)

With COVID-19 being declared a pandemic, various companies have found themselves facing challenges in complying with the Companies Act compliances due to disruptions in their operations. The rampant spread of the virus in the world and more specifically in India now, has called for relaxations in corporate compliance requirements and introduction of strategic policy decisions to limit the spread of the virus. In light of the same, the Ministry of Corporate Affairs (MCA) vide its circular no.

The Reserve Bank of India (RBI) revised the features of investment by Foreign Portfolio Investors (FPIs) in India vide two circulars published on 22 January 2020, namely the circular on FPI investment in debt (FPI Investment Circular) and Voluntary Retention Route’ (VRR) for FPIs investment in debt (VRR Circular).