Day Trading Stocks & Futures
- Thread starter TraderRavi
- Start date
- Tags banknifty bnf daytrading nifty future
I'm in same boat as Mohan, although riding the trend wave, still jump out quickly. But if trade is against me, I keep holding it no matter how much my inner voice keep telling me 'get out of here'
example, today ZEEL entered @ 10:01:41 short exited at 10:02:15 for Rs. 2 !! could have got at least 10rs if waited 2-3 min
example, today ZEEL entered @ 10:01:41 short exited at 10:02:15 for Rs. 2 !! could have got at least 10rs if waited 2-3 min
https://www.business-standard.com/a...ad-as-one-time-settlement-119073100053_1.html
RBI allows domestic banks to sell NPAs abroad as one-time settlement
The Reserve Bank of India (RBI) on Tuesday allowed domestic banks to directly sell their bad loans in manufacturing and infrastructure sectors to investors abroad as part of one-time settlement (OTS) exercises. The move will allow overseas investors to take direct loan exposure to Indian corporates.
The defaulters, or stressed borrowers, can sell their assets in accordance with the OTS scheme, in order to raise external commercial borrowing (ECB) from abroad to repay domestic loans, the RBI said in a statement.
At the same time, Indian corporates can raise long-term loans for working capital, ‘general corporate purposes’ and repaying domestic rupee loans, the statement said.
Apart from easing the non-performing asset (NPA) pressure on domestic banks, the RBI’s move can allow companies to raise cheap, long-term loans easily now. Part or all of that can be used to retire domestic loans.
The RBI notification said corporate borrowers can avail of ECB “for repayment of rupee loans availed domestically for capital expenditure in manufacturing and infrastructure sector and classified as SMA-2 or NPA, under any one-time settlement arrangement with lenders”. SMA is special mention account, in which SMA-2 is the loan not serviced between 60 days and 90 days.
If the loan is not serviced on the 91st day, it becomes NPA.
“Lender banks are also permitted to sell, through assignment, such loans to eligible ECB lenders, except foreign branches/overseas subsidiaries of Indian banks, provided, the resultant external commercial borrowing complies with all-in-cost, minimum average maturity period and other relevant norms of the ECB framework,” the notification said.
Experts said it diversifies the loan market for the corporate borrowers.
“This is a good solution, which would shift credit outside of the Indian banking sector, but it would also increase our forex exposures,” said Abizer Diwanji, national leader of financial services for EY. Senior bankers, speaking on condition of anonymity, told Business Standardthat the move potentially opens up two possibilities. One, instead of heading for the Insolvency and Bankruptcy Code (IBC), banks and the companies can now easily get into a OTS scheme between themselves, funds for which have to be raised abroad by the defaulter, or the banks.
Bankers pointed out that the RBI was distinctly uncomfortable with this route and didn’t allow companies to raise money abroad to repay domestic loans for the precedence of the money abroad is not known. Even as the deal has to be through an ECB, which can be given only by eligible lenders, who are also regulated entities. But there is some element of gray area that is beyond the scope of the RBI or any other Indian regulator to find out.
RBI allows domestic banks to sell NPAs abroad as one-time settlement
The Reserve Bank of India (RBI) on Tuesday allowed domestic banks to directly sell their bad loans in manufacturing and infrastructure sectors to investors abroad as part of one-time settlement (OTS) exercises. The move will allow overseas investors to take direct loan exposure to Indian corporates.
The defaulters, or stressed borrowers, can sell their assets in accordance with the OTS scheme, in order to raise external commercial borrowing (ECB) from abroad to repay domestic loans, the RBI said in a statement.
At the same time, Indian corporates can raise long-term loans for working capital, ‘general corporate purposes’ and repaying domestic rupee loans, the statement said.
Apart from easing the non-performing asset (NPA) pressure on domestic banks, the RBI’s move can allow companies to raise cheap, long-term loans easily now. Part or all of that can be used to retire domestic loans.
The RBI notification said corporate borrowers can avail of ECB “for repayment of rupee loans availed domestically for capital expenditure in manufacturing and infrastructure sector and classified as SMA-2 or NPA, under any one-time settlement arrangement with lenders”. SMA is special mention account, in which SMA-2 is the loan not serviced between 60 days and 90 days.
If the loan is not serviced on the 91st day, it becomes NPA.
“Lender banks are also permitted to sell, through assignment, such loans to eligible ECB lenders, except foreign branches/overseas subsidiaries of Indian banks, provided, the resultant external commercial borrowing complies with all-in-cost, minimum average maturity period and other relevant norms of the ECB framework,” the notification said.
Experts said it diversifies the loan market for the corporate borrowers.
“This is a good solution, which would shift credit outside of the Indian banking sector, but it would also increase our forex exposures,” said Abizer Diwanji, national leader of financial services for EY. Senior bankers, speaking on condition of anonymity, told Business Standardthat the move potentially opens up two possibilities. One, instead of heading for the Insolvency and Bankruptcy Code (IBC), banks and the companies can now easily get into a OTS scheme between themselves, funds for which have to be raised abroad by the defaulter, or the banks.
Bankers pointed out that the RBI was distinctly uncomfortable with this route and didn’t allow companies to raise money abroad to repay domestic loans for the precedence of the money abroad is not known. Even as the deal has to be through an ECB, which can be given only by eligible lenders, who are also regulated entities. But there is some element of gray area that is beyond the scope of the RBI or any other Indian regulator to find out.
The fine print
- Corporates can raise long-term ECB loans for working capital, general purpose, and to repay domestic loans
- Banks or corporates can sell bad loans directly to ECB lenders abroad
- Loans raised will be part of one-time settlement with companies
- Loans with minimum average maturity of 7-10 years can be raised to repay domestic loans
- RBI was earlier opposed to raising ECBs to repay domestic loans
- Experts say the move can raise India’s external liability significantly and build up risks
- Domestic ARCs to lose business, will be forced to merge
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