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Top global banks crash crypto party, invest heavily in blockchain, currency firms, BFSI News, ET BFSI

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Despite being very vocal about how bad Bitcoin supposedly is, top global can’t ignore the potential revenue streams and importance of having a strong strategic position in the crypto economy.

Most major banks including Standard Chartered, Barclays, Citigroup, Goldman Sachs are investing in crypto and blockchain-related companies in 2021.

Out of the top 100 banks by assets under management, 55 have invested in cryptocurrency and/or blockchain-related companies. Either directly, or through subsidiaries, according to Block Data.

The most active investors based on the number of investments in blockchain companies are Barclays (19), Citigroup (9), Goldman Sachs (8), J.P. Morgan Chase (7) and BNP Paribas (6).

The investors active in the biggest funding rounds are Standard Chartered ($380 million in 6 rounds), BNY Mellon ($320.69 million in 5 rounds), Citigroup ($279.49 million in 9 rounds), UBS Group ($266.2 million in five rounds) and BNP Paribas ($236.05 million in 9 rounds).

Where are they investing?

About 23 of the top 100 banks by assets under management are building custody solutions, or investing in the companies that provide them.

Custodians offer financial services to look after their clients’ funds, for a fee. They either build their own technology to offer this service, or use a technology provider whose solutions they can integrate into their own systems.

Why are banks investing in cryptos

Seeing cryptocurrency exchanges with a fraction of their staff become substantially more profitable or valuable than many banks. This started as early as 2018, when Binance, the leading exchange at the time, recorded $54 million more profit than Deutsche Bank, with just 200 vs 100,000 employees. More recently, Coinbase’s valuation was higher than Goldman Sachs, with just 4% of their employees.

Countless requests from their clients to provide Bitcoin solutions along with a change in regulations in 2020 that allows banks to offer crypto custody solutions is also among the reasons for banks to turn to cryptos.

The investments

Standard Chartered has invested $380 million via 6 rounds in firms including blockchain network Ripple, whose XRP token has a capitalisation of around $48 billion. It’s also an investor in Cobalt, a trading technology provider based in the UK. BNY has put money in Fireblocks, whose platform allows financial institutions to issue, move and store cryptocurrencies.

Citibank has invested $279 million in 9 rounds. It has put money in SETL, whose ledger technology is used to move cash and other assets.

UBS, with $266 million and 2 rounds, is an investor in Axoni, whose technology is used to modernize infrastructure in capital markets.

BNP Paribas has invested $236 million in 9 rounds and was developing real-time trade and settlement applications using smart contracts based on the DAML programming language with Digital Asset.

Morgan Stanley with $234 million with 3 investments has invested in NYDIG, a crypto custody firm and the bitcoin subsidiary of Stone Ridge, a $10 billion alternative asset manager.

JP Morgan Chase has bet $206 million via seven rounds and has investments in ConsenSys, an ethereum software company.

Goldman Sachs has put $204 million through eight investments, and its investee firms include Coin Metrics, a provider of blockchain data to institutional clients.

MUFG has put $185 million in six investment rounds in firms including Coinbase, the US cryptocurrency exchange that went public in April, and in Bitflyer, a Tokyo-based cryptocurrency exchange.

ING has bet $170 million spread across 6 investments and has backed HQLAx, a blockchain liquidity management platform.



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Reserve Bank of India – Press Releases

Press Releases

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April 14, 2015




Dear All




Welcome to the refurbished site of the Reserve Bank of India.





The two most important features of the site are: One, in addition to the default site, the refurbished site also has all the information bifurcated functionwise; two, a much improved search – well, at least we think so but you be the judge.




With this makeover, we also take a small step into social media. We will now use Twitter (albeit one way) to send out alerts on the announcements we make and YouTube to place in public domain our press conferences, interviews of our top management, events, such as, town halls and of course, some films aimed at consumer literacy.




The site can be accessed through most browsers and devices; it also meets accessibility standards.



Please save the url of the refurbished site in your favourites as we will give up the existing site shortly and register or re-register yourselves for receiving RSS feeds for uninterrupted alerts from the Reserve Bank.



Do feel free to give us your feedback by clicking on the feedback button on the right hand corner of the refurbished site.



Thank you for your continued support.




Department of Communication

Reserve Bank of India


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RBI’s first financial inclusion index at 53.9

Banking & Finance

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The first reading of the Reserve Bank of India’s annual Financial Inclusion (FI) Index for the period ending March 2021 has come in at 53.9 against 43.4 for the period ending March 2017.

The index captures information on various aspects of financial inclusion in a single value ranging between 0 and 100, where 0 represents complete financial exclusion and 100 indicates full financial inclusion.

The FI Index comprises three broad parameters (weights indicated in brackets) – Access (35 per cent), Usage (45 per cent), and Quality (20 per cent), with each of these consisting of various dimensions computed based on a number of indicators.

RBI comes up with Digital Payments Index

The Index, which has been has been constructed without any ‘base year’ and as such reflects cumulative efforts of all stakeholders over the years towards financial inclusion, is responsive to ease of access, availability and usage of services, and quality of services, comprising all 97 indicators, the RBI said in a statement.

A unique feature of the Index is the Quality parameter, which captures the quality aspect of financial inclusion as reflected by financial literacy, consumer protection, and inequalities and deficiencies in services, it added.

The FI Index, which will be published annually in July every year, has been conceptualised as a comprehensive index incorporating details of banking, investments, insurance, postal as well as the pension sector in consultation with government and respective sectoral regulators.

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3 Auto Stocks That Gave Returns Over 100% In The Past Year

Personal Finance

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Tata Motors

Tata Motors, part of the Tata Group, is an Indian multinational automotive manufacturing corporation located in Mumbai, Maharashtra. Passenger cars, trucks, vans, coaches, buses, sports cars, construction equipment, and military vehicles are all manufactured by the firm.

The stock gained 17.6 percent over three years, compared to 43.51 percent for the Nifty 100. t to investors. Over a three-year period, the stock returned 17.6 percent, while the Nifty Auto returned -6.03 percent to investors. The stock has returned 145 percent in the last 12 months. Since July 3, 2002, Tata Motors Ltd. has issued 15 dividends.

The passenger car market is up with a 25 percent MoM increase and 101 percent YoY growth, demonstrating that the company’s footing in the domestic automobile segment has not eroded.

TATA MOTORS LTD FUNDAMENTALS
Parameter Values
Market Cap (Rs. in Cr.) 99376.81
Earning Per Share (EPS TTM) (Rs.) -4.59
Price To Earnings (P/E) Ratio 0.00
Book Value Per Share (Rs.) 45.30
Price/Book (MRQ) 6.61
Price/Earning (TTM) 44.06
ROCE (%) 0.11

Tube Investments

Tube Investments

Tube Investments, founded in 2008, is a Consumer Durables-focused Mid Cap business with a market capitalization of Rs 24,382.19 crore. The stock returned 375.39 percent over three years, compared to 43.59 percent for the Nifty Midcap 100. The stock has returned 115 percent in the last 12 months.

Since February 22, 2018, Tube Investments of India Ltd. has declared 7 dividends.

Tube Investments of India Ltd. has issued an equity dividend of Rs 3.50 per share in the last 12 months. This translates to a dividend yield of 0.28 percent at the current share price of Rs 1251.95.

TUBE INVESTMENTS OF INDIA LTD FUNDAMENTALS
Parameter Values
Market Cap (Rs. in Cr.) 24061.67
Earning Per Share (EPS TTM) (Rs.) 14.16
Price To Earnings (P/E) Ratio 88.08
Book Value Per Share (Rs.) 90.59
Price/Book (MRQ) 13.77
Price/Earnings (TTM) 56.91
ROCE (%) 16.57

Ashok Leyland

Ashok Leyland

Ashok Leyland is a Chennai-based Indian multinational automobile company. The Hinduja Group owns the property. It began as Ashok Motors in 1948 and changed its name to Ashok Leyland in 1955. Ashok Leyland gets a buy call from Motilal Oswal with a target price of Rs 155. Ashok Leyland Ltd. is currently trading at Rs 130.05.

When Ashok Leyland price reaches the defined target, the analyst estimates it will take one year. The stock has returned 104 percent in the last 12 months. Only 3.11 percent of trading sessions in the last 16 years had intraday drops of more than 5%. Since June 18, 2001, Ashok Leyland Ltd. has issued 20 dividends.

ASHOK LEYLAND LTD FUNDAMENTALS
Parameter Values
Market Cap (Rs. in Cr.) 37163.78
Earning Per Share (EPS TTM) (Rs.) -0.71
Price To Earnings (P/E) Ratio 0.00
Book Value Per Share (Rs.) 22.96
Price/Book (MRQ) 5.51
Price/Earning (TTM) 66.32
ROCE (%) -0.99

Disclaimer

Disclaimer

The views and investment tips expressed by authors or employees of Greynium Information Technologies, should not be construed as investment advise to buy or sell stocks, gold, currency or other commodities. Investors should certainly not take any trading and investment decision based only on information discussed on GoodReturns.in



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4 Best Term Deposit Schemes For Senior Citizens To Invest In 2021

Personal Finance

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SBI ‘WECARE’ Senior Citizens’ Term Deposit Scheme

Senior citizens will receive additional interest on their term deposits if they invest for a tenor of 5 to 10 years under this deposit scheme of State Bank of India (SBI). They will be paid an additional rate of 30 basis points over and above the existing premium of 50 basis points over the public card rate, for a total of 80 basis points over the public card rate. The interest will be paid on a monthly or quarterly basis.

This scheme is applicable to new deposits as well as renewals of maturing deposits, and TDS will be levied in accordance with the Income Tax Act. SBI now provides a 5.4 percent interest rate on five-year FDs to the general public. Senior citizens will receive a 6.20 percent interest rate on deposits of less than Rs 2 crore under the special FD scheme. SBI’s current fixed deposit interest rates for senior citizens can be found here.

Tenor Interest Rates In %
7 days to 45 days 3.4
46 days to 179 days 4.4
180 days to 210 days 4.9
211 days to less than 1 year 4.9
1 year to less than 2 year 5.5
2 years to less than 3 years 5.6
3 years to less than 5 years 5.8
5 years and up to 10 years 6.2
Source: SBI, W.e.f. 08.01.2021

HDFC Bank Senior Citizen Care FD

HDFC Bank Senior Citizen Care FD

Senior Citizens who make a deposit of less than 2 crores for a duration of 5 (five) years 1 day to 10 Years during the special deposit offer beginning from 18th May’20 to 30th Sep’21 will receive an additional premium of 0.25 percent over and above the existing premium of 0.50 percent. During the aforementioned duration, this special deal will be available to new fixed deposits as well as renewals.

Non-Resident Indians are not eligible for this special fixed deposit scheme of HDFC Bank. If a term deposit made under the scheme is prematurely closed, including sweep-in / partial closure, on or before 5 years, the interest rate will be 1.00 percent lower than the contracted rate or the base rate applicable for the term the deposit has been with the bank, whichever is lower.

The interest rate will be 1.25 percent below the contractual rate or the base rate applicable for the duration the deposit has stayed with the bank, whichever is lower, if a term deposit made under the scheme is prematurely closed, including sweep-in / partial closure after 5 years by a senior citizen. The most recent senior citizens’ fixed deposit interest rates of HDFC Bank are listed below.

Tenor Bucket Senior Citizen Rates (per annum)
7 – 14 days 3.00%
15 – 29 days 3.00%
30 – 45 days 3.50%
46 – 60 days 3.50%
61 – 90 days 3.50%
91 days – 6 months 4.00%
6 months 1 day – 9 months 4.90%
9 months 1 day to less than 1 Year 4.90%
1 Year 5.40%
1 year 1 day – 2 years 5.40%
2 years 1 day – 3 years 5.65%
3 year 1 day- 5 years 5.80%
5 years 1 day – 10 years 6.25%
Source: HDFC Bank, W.e.f. 21st May 2021

ICICI Bank Golden Years Fixed Deposit

ICICI Bank Golden Years Fixed Deposit

Senior citizens will get an additional interest rate of 0.30 percent per year on their fixed deposits of 5 years 1 day up to 10 years under this special fixed deposit scheme, in addition to the prevailing additional rate of 0.50 percent per year. During the scheme’s existence, the additional rate will be offered on both new and renewing deposits.

The special fixed deposit scheme of ICICI Bank will be available until October 7, 2021. Only deposits of less than Rs 2 crore are eligible under this scheme. The applicable penalty rate will be 1.30 percent if a deposit made under the scheme is prematurely withdrawn/closed on, or after 5 years 1 day.

If a deposit opened under the special deposit scheme is withdrawn or closed before 5 years and 1 day, the current premature withdrawal rule will apply. Interest rates on fixed deposits for senior citizens of ICICI Bank are mentioned below.

Maturity Period Senior Citizen Rates (per annum)
7 days to 14 days 3.00%
15 days to 29 days 3.00%
30 days to 45 days 3.50%
46 days to 60 days 3.50%
61 days to 90 days 3.50%
91 days to 120 days 4.00%
121 days to 150 days 4.00%
151 days to 184 days 4.00%
185 days to 210 days 4.90%
211 days to 270 days 4.90%
271 days to 289 days 4.90%
290 days to less than 1 year 4.90%
1 year to 389 days 5.40%
390 days to 5.40%
18 months to 2 years 5.50%
2 years 1 day to 3 years 5.65%
3 years 1 day to 5 years 5.85%
5 years 1 day to 10 years 6.30%
5 Years (80C FD) – Max to Rs 1.50 lac 5.85%
Source: ICICI Bank, W.e.f. Oct 21, 2020

Bank of Baroda Special Fixed Deposit Scheme

Bank of Baroda Special Fixed Deposit Scheme

Bank of Baroda (BoB) offers an additional rate to senior citizens for a deposit amount of less than Rs 2 Cr. However, under the special fixed deposit scheme, elderly persons would get an extra rate of 1.00 percent for tenors of “Above 5 years to up to 10 years,” which will be valid until September 30, 2021.

Tenors Senior Citizen Rates (per annum)
7 days to 14 days 3.30%
15 days to 45 days 3.30%
46 days to 90 days 4.20%
91 days to 180 days 4.20%
181 days to 270 days 4.80%
271 days & above and less than 1 year 4.90%
1 year 5.40%
Above 1 year to 400 days 5.50%
Above 400 days and upto 2 Years 5.50%
Above 2 Years and upto 3 Years 5.60%
Above 3 Years and upto 5 Years 5.75%
Above 5 Years and upto 10 Years 6.25%
Source: BoB, W.e.f. 16.11.2020



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Stocks To Buy: For A 25% Upside Buy This Restaurant Chain Shares, Says Motilal Oswal

Personal Finance

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Investment

oi-Sunil Fernandes

|

Broking firm, Motilal Oswal has a buy call on the stock of Burger King India and sees a potential upside of 25% on the shares from current levels.

Current market price Rs 168
Target price Rs Rs 210
Gains % 25%

Strong financial performance

According to Motilal Oswal. despite dine-in restrictions due to the second COVID wave, Burger King India delivered a strong 1QFY22 performance, led by the delivery channel. The recovery trends in Jul-Aug’21 continue to remain encouraging, the brokerage has noted.

“As states allow operations at Malls (55% of the stores are in Malls) and dine-in, Burger King India will see significant improvement in its performance. Its recently launched Stunner menu has also gotten off to a good start. With the widening of the value platform and elevation of the entry point, the Stunner menu is expected to significantly aid Burger King India’s performance,” the brokerage has said. According to it, with the widening of the value platform and elevation of the entry point, the Stunner menu is expected to significantly aid Burger King’s performance. “We continue to remain bullish on Burger King India as the the Stunner menu enhances the value platform, while being gross margin accretive. The introduction of BK Café is expected to boost SSSG and margin.

Apart from this the strong network expansion, won’t materially impact ADS, and its royalty rate is capped at 5% till CY39, while offering visibility on margin expansion. Also, the company has reduced its rental expenses. We maintain our Buy rating with a target price of Rs 210 per share (28x Sep’23E EV/EBITDA),” the brokerage has said.

Burger King India clocked a 130% quarter on quarter with sales growth in own app orders and over 1 million app downloads in 1QFY22. Its goal is to have one-third of delivery orders from the BK app. Burger King India is likely to open a few cafés in 3Q (for test marketing) v/s 4QFY22 guided earlier. It has mapped 75-100 restaurants for adding BK Cafés. All new outlets will have a BK Café. All this should boost the performance of the company in the coming quarters, which makes the shares of Burger King India an interesting stock to buy at the current levels.

Stocks To Buy: For A 25% Upside Buy This Restaurant Chain, Says Motilal Oswal

Disclaimer

The article is informational in nature, which is taken from the brokerage report of Motilal Oswal institutional Equities. Please do consult a professional advisor. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates and authors do not accept culpability for losses and/or damages arising based on information in the article.



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Delhi govt’s finance dept relaxes norms for departments on expenses above Rs 1 crore, BFSI News, ET BFSI

Personal Finance

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NEW DELHI: With the pandemic making a big dent on Delhi government’s revenue, finance department had issued orders to ensure better cash management, including asking all departments to seek its relaxation before incurring expenditure of Rs 1 crore and above. The department, in its recent order, has relaxed this criteria.

In various orders on “expenditure management and rationalisation of expenditure” since the Covid-19 outbreak, different directions have been given on any expenditure of Rs 1 crore and above. In an office memorandum issued on June 17 this year, the finance department’s budget division had directed that all the administrative secretaries and heads of departments to obtain relaxation from the finance department for incurring expenditure of Rs 1 crore or more.

In a recent office memorandum, however, the finance department has allowed seeking relaxation through letters instead of files. In the memorandum, the finance department has stated that it was observed that several proposals were being sent to the department for relaxation, which was required only in cases where the expenditure was of Rs 1 crore and above. “These proposals are in turn examined in the finance department, which takes time and delays the process,” it stated.

In a partial modification of the instructions issued on June 17, the office memorandum issued on August 10 stated that it has now been decided that the administrative departments were not required to send files to the finance department for relaxation. Instead, they would approve the proposals at their level and “send a letter on a weekly basis” to the finance department in a tabulated format.

The orders on expenditure management, however, exclude certain expenditures from the necessary approvals, such as expenditure related to salaries and allowances, medical reimbursement, pension of senior citizens and widows.



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HDFC Bank approves issuance of debt instruments in the form of AT1 bonds from overseas markets

Banking & Finance

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HDFC Bank on Monday said it will issue debt instruments in the form of Additional Tier 1 bonds in international markets. “…we had informed the stock exchanges that the Board of Directors of HDFC Bank in its meeting held on July 17, 2021, is contemplating raising of long term funds through the issuance of Basel III compliant Additional Tier 1 Bonds (Notes), in the international markets, subject to market conditions,” it said in a stock exchange filing.

An offering memorandum has been prepared and shall be made available to the prospective investors in relation to the contemplated issue of Notes, it further said. The bank, however, did not specify the amount to be raised.

Ba3 (hyb) rating

Meanwhile, Moody’s Investors Service in a statement said it has assigned a Ba3 (hyb) rating to HDFC Bank’s proposed USD-denominated, undated, non-cumulative and subordinated AT1 capital securities. “The Ba3 (hyb) rating is three notches below HDFC Bank’s baa3 Baseline Credit Assessment (BCA) and Adjusted BCA, reflecting the probability of impairment associated with non-cumulative coupon suspension, as well as the likelihood of high loss severity when the bank reaches the point of non-viability,” it said. In its meeting on July 17, the bank’s board had approved the issue of standalone foreign currency-denominated Perpetual Debt Instruments as Basel III-compliant AT1 bond for foreign (global) investors outside India, on an unsecured , public or a private placement basis, along with a proposed listing of the AT1 Bonds and other related activities in the course of the financial year 2021- 22, subject to market conditions and applicable approvals.

Also read: Is HDFC Ergo Optima Secure value for money?

Earlier, the State Bank of India had also raised capital by AT1 bonds in the overseas market. The capital raised through the AT1 bonds will help enhance the bank’s capital base. HDFC Bank’s total Capital Adequacy Ratio was at 19.1 per cent as on June 30, 2021 as against a regulatory requirement of 11.075 per cent.

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2 NBFC And Clothing Stocks To Buy For Gains Up To 68% And Good Dividends

Personal Finance

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Buy Power Finance Corporation for 68% Gains

Current market price Rs 131
Target price Rs Rs 220
Gains % 68%

Emkay Global has recommended buying the stock of Power Finance Corporation for a target price of Rs 220, as against the current market price of Rs 131.

According to the brokerage house, asset-quality trends were encouraging, as out of the total Stage-3 assets of Rs 211.5 billion for 26 projects, 16 projects worth Rs 158.2 billion are already admitted under the NCLT with 69% provision coverage, while 10 projects worth Rs 53.3 billion with 54% coverage are being pursued outside the NCLT. Overall coverage improved to 65% from 63% last quarter.

Aatmanirbhar plans for SEB may support near-term disbursements; however, finding new growth avenues – amid weak thermal power additions – is a necessity, Emkay Global has said.

“We continue to like the company based on improving asset-quality trends and an attractive risk-reward. Maintain Buy on the stock of Power Finance Corporation and roll forward to Sept’22E with a revised target price of Rs 220 (Rs 215 earlier), corresponding to 1x P/Adjusted Sept’23E book. We are increasing the dividend payout estimate to 45% by FY24E, based on revised guidelines from the RBI,” the brokerage has said.

PFC is also available at a good dividend yield of more than 7%.

Buy TCNS Clothing stock

Buy TCNS Clothing stock

Current market price Rs 568
Target price Rs Rs 860
Gains % 51%

The brokerage is also bullish on the stock of TCNS Clothing and has suggested buying the stock for gains up to 51%.

“Revenue recovery of 35% in Q1 was in line with peers and better than 10% recovery seen last year. Better recovery was aided by a healthy 112% recovery in the ‘online & others’ channel. The physical channels (EBO/LFS) remained impacted with a 15-20% recovery due to store closures for half of Q1 and operational restrictions upon opening. TCNS Clothing, however, indicated a faster recovery of 70% for operational stores and a better fresh sales mix in the ongoing EOSS,” the brokerage has said.

According to Emkay Global, TCNS Clothing does not plan to raise additional capital to fund organic growth. Notably, TCNS Clothing was also able to tide through the FY21 Covid crisis with a stronger debt-free balance sheet, unlike many apparel peers, which raised capital to either fund losses or pursue grow

“We increase FY23/24 EPS estimates by 20% and 4% on front-loading of per-store recovery in FY23E vs. FY24E earlier. TCNS’ design/sourcing edge, agile back-end and strong online presence keep us positive. Maintain a Buy on the stock of TCNS Clothing with a revised target price of Rs 860,” the brokerage has said.

Disclaimer

Disclaimer

The article is informational in nature, which is taken from the brokerage report of Emkay Global. Please do consult a professional advisor. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates and authors do not accept culpability for losses and/or damages arising based on information in the article.



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Siva Industies lenders, slammed NCLT over settlement deal, to move NCLAT, BFSI News, ET BFSI

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The Siva Industries resolution has many a twist left.

After the National Company Law Tribunal rejected the one-time settlement offer made by Siva Industries and ordered that the company will go into liquidation, the lenders are planning to move the appellate tribunal NCLAT.

The NCLT order

The NCLT Chennai Bench, comprising R. Sucharitha and Anil Kumar B., said in the order, “The purported settlement plan proposed by the promoters of the Corporate Debtor is not a Settlement simpliciter, rather it is a ‘Business Restructuring Plan’. As per the plan, there is no final offer made by the promoter of the corporate debtor and also the acceptance made by the CoC in this regard. There is no finality reached between the promoter of the Corporate debtor and the CoC of the Settlement proposal; hence based on ambiguity of the terms of settlement, we cannot order for the withdrawal of CIRP.”

The order also said that seeking liquidation should there be a default was beyond the scope of IBC.

The NCLT said the application made by RCK Vallal, one of the shareholders of the company, is not conforming to the Section 12A of the Insolvency and Bankruptcy Code.

Paltry recovery

Eyebrows had been raised at the settlement offer as public sector banks agreed to settle with the promoter of Siva Industries, a huge loan of Rs 4,863 crore at just 318 crore — recovery of only 6.5 per cent.

Lenders were even withdrawing the bankruptcy process of Siva Industries,

It was pointed out that the settlement amount accepted by banks is even lower than the liquidation value of Siva Industries — will result in loss of approximately Rs 4,700 crore public money

Instead of invoking personal guarantee of promoters, the public sector bank Canara Bank privately sold its exposure of Rs 1,148 crore to a foreign owned ARC — International Asset Reconstruction Company Private Limited (IARC).

CBI has also filed criminal case against former senior officials of IDBI Bank and Sivasankaran for allegedly defrauding the lenders to the tune of Rs 600 crore.

Other rejections

Bankruptcy experts have termed the settlement unusual, citing the rejection of such offers by promoters in the past.

The acceptance of Sivasankaran’s offer differs from the usual pattern of rejection by creditors of such deals proposed by promoters seeking to withdraw their companies from bankruptcy proceedings.

Atul Punj of Punj Lloyd, Videocon’s Venugopal Dhoot, Sanjay Singal of Bhushan Power and Steel, and the Ruias of Essar Steel had all made offers to creditors to persuade them to drop bankruptcy proceedings. All were rejected.

In DHFL’s case, the promoter Kapil Wadhawan had offered to repay the debt in full, but the lenders ruled in favour of Piramal.

Experts say while banks may be getting the most out of such settlement in absence of any serious bid, but such a move weakens the IBC, especially Section 29A that bars promoters from bidding for their assets in a bankruptcy court. The Siva deal, if it goes through, could set a precedent of promoters striking settlement deals with banks when there are no bidders.



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