Without cleaning up the NPA table, the banking sector cannot be readied for any further reforms, including the Sale of unviable banks to private parties. Hence, the move by the RBI and the government is in the right direction.What will also work in the favour of the sector is that the government has finally acknowledged the problem of capital shortage of state-run banks by announcing a Rs 2.11 lakh crore capital infusion plan. If this works as planned, the banking sector will get a significant growth push.
While tightening the IBC framework is a key step, what is also required is keeping a tab on share price manipulations of stressed companies facing bankruptcy proceedings. Shares of such companies offer golden opportunities for speculators to manipulate and small shareholders get trapped as unintended victims. This is something experts have pointed out.
%u201CSpeculative movements in stock prices of companies undergoing resolution in the IBC could lead to distortion in efficient resolution, particularly where conversion of debt or infusion of equity is proposed, and therefore steps to monitor and regulate speculative price movements through appropriate mechanisms for a two to three month window till clarity on resolution emerges should be considered in the larger interest of all stakeholders,%u201D said Manish Aggarwal, Partner and Head - Resolutions, Special Situations Group, KPMG, in a note.The Modi-government has learned a hard lesson in the Kingfisher-Vijay Mallya episode. Mallya cleverly made all the 17-lenders who cumulatively lent Rs 9,000 crore (including accumulated interest amount) to the failed airline
Why is the message offensive? Please click on the reason below to notify the moderating team. Marking good messages offensive will put you on the moderating team`s radar.
Repost this message
Without cleaning up the NPA table, the banking sector cannot be readied for any further reforms, including the Sale of unviable banks to private parties. Hence, the move by the RBI and the government is in the right direction.What will also...
Thank you for reposting this message.