The effect of the RBI circular fell disproportionately on the power sector.
The power sector has some genuine reasons for the high levels of defaulted loans. Some of the blame for the failure to repay loans was due to government inactions, like the electricity regulatory commissions not updating the price of electricity, change in government policy on coal supply, failure to execute power purchase agreements, and the non-payment of dues by state electricity distribution companies. Owing to the supreme court's verdict, shares of power companies hogged limelight throughout the day.
A recent report by the Reserve Bank of India on the trends and progress of banking in India FY18, showed an interesting comparison on the efficacy of the IBC in improving the recovery rate and in providing the lenders with a better realisation in comparison to the erstwhile regime of recovery. Also, reasearch analyst, Sarvajeet Bodas had pointed back then, things were about to change for the better. Here's what he wrote:. But now after supreme court's order, banks plan for higher recovery through NCLT cases initiated becomes null and void. It shows gross NPAs to gross advances of the leading banks in India over the years.
There has been a clear rise in NPAs and provisions in all the banks. With the introduction of IBC, a loan worth over Rs 2.
Population Growth - Boon or Bane to India's growth
This resulted in a surge in NPAs and put additional pressure on the banks to make provisions. The new framework specifies banks report defaults on a weekly basis in the case of borrowers with more than Rs 50 million in bank debt. The question now is will these banks maintain such high provisions for debt after the Supreme Court ruling? As per an article in The Economic Times, after the code became operational, about 3, cases were disposed of by the adjudicating authority based on out-of-court settlements between debtors and creditors involving claims amounting to over Rs 1.
As a result, the credit growth that banks in India posted in December quarter of , at It was nearly 2 times GDP growth. But it was also back to the five-year high. Ultimately, the total flow of resources to the commercial sector in India, both bank and non-bank, and domestic and foreign relatable to the non-food sector , have gone up. As per the reports, total debt estimated to have been impacted due to the RBI circular was Rs 3.
Population Growth - Boon or Bane to India's growth
These companies will now get the earlier options for restructuring. The IBC code had its own pros and cons. The economy, especially a few sectors, benefited up to a certain extent. But this came at the cost of power, sugar and other sectors which suffered the most due this circular. Now you can't deny the fact that, for the IBC to truly succeed, it was important the government let the central bank do its job independently and thwart systemic risks due to the bad loans. What we truly need is a fair set of rules to set the banking house in order.
Now, what the government and RBI does further to correct this remains to be seen.
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Rini Mehta is a keen follower of the stock markets and economy. At Equitymaster, she covers daily stock market moves and broader market trends across Indian and global markets. Equitymaster requests your view! Click here! I think through this article it is being tried to project that due to SC declaring 12th February circular invalid as it was not issued within RBI power to issue , the whole IBC process has been jeopardised. This is a very misleading approach to whole issue. Nobody suggested that IBC is not beneficial.
Problem with the RBI circular was that it was issued without requisite powers and it has formulae which is one fit solution for all problem. This would have eventually clogged the legal proceedings. Normally a circular which has a far reaching consequences on the economy cannot be left to wisdom of one or two directors of RBI. RBI, being a regulator should have issued draft circular much in advance for suggestions and then issued final circular after consultation. How can an institution claim to be a paragon of virtue.
It has to also solicit opinions from all the concerned stakeholders including government. As far as all of us know RBI never consulted anybody before issuing the circular and has acted on its own and was not amenable to any changes despite the fact that the straight jacket formulae cannot be applied o all the situations. Hence while agree with the fact that the IBC has brought some fear amongst the borrower and discipline within lenders,12th February circular cannot be justified as no institution is above law and circular such a far reaching consequences cannot be left to wisdom of a few people only.
Like online discounts, the stock markets offers discounts too every now and then.
Here is what a retail investor needs to do when it happens Therefore, China might become a serious competitor to middle- or even high-technological industries, for example to businesses located in countries which are successful in this sector like the USA and Germany. The presence of this threat for our industries can be seen in the example of Huawei — a Chinese telecommunications equipment maker.
Its equipment and services are considered good enough to beat Siemens. Additionally, another illustrative example is the case of the company Zhenhua Port Machinery, because this business has about two thirds of all worldwide port crane orders in Is China an economic threat or boon to European trade? Essay, 4 Pages, Grade: 1,6. Add to cart. One of the straight farward way to make the banking site accessible to the hearing impaired people is to make the language simple particularly for BSL users for whom English is second language.
The people who are hearing impaired,canot use telephone banking. And the users of hearing aids will experience electromagnetic interference,from mobile phones. The radio signals from mobile telephones can arise humming and buzzing inside hearing aid. And people with vision problems can use online banking based on how the site is designed for the people with vision disabilities i.
The browser should have the option to vary the text size so that they can increase the font. The main problem for them is the graphics in the websites are not meaningful when they are accessing with a text browser. And people with vision problems find hard to use telephone banking because of the decreasing in the size of mobile phones. Due to the compact size of mobiles people with low sight find hard to use the small keypads and smaller screens.
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And some people are unable to distinguish colour combinations used in mobile keypads and screens. And mailed notifications regarding e-banking are inaccessible to blind and people with low vision if they are not provide in alternate formats. The Banking websites with too many steps and unhelpful messages are difficult to browse for cognitively impaired people.
Social Media: A Boon or a Bane for Society and Individuals
The websites designed with complex page layouts,tables and navigation structures confuse these people and are become difficult to browse. And in telephone banking, mobile phones of latest technology are coming with so many features and complex operating systems. People with Cognitive disabilities find difficult to operate these kind of mobile phones.
http://argozemly.ru/modules/lox-prix-hydroxychloroquine.php People having dyslexia finds difficult to remember the PIN in the correct order and may enter incorrectly. So these people are prone to writing them down which lessens the security and can be misused. People as they age will experience so many changes in memory,eye sight,hearing and dexterity and they might not consider to have disabilities.
These people will be benifited by the accessibility provisions that make websites accessible.
People having age related eye sight may access the website by changing the text size. These people also finds difficult to use the mouse. Older people finds difficult to use mobiles having complex operating systems and too many options. If you are the original writer of this essay and no longer wish to have the essay published on the UK Essays website then please:. Essays Information Technology.