arihant competition in focus current affairs

 arihant competition in focus current affairs

arihant competition in focus current affairs published this article page no304

The annual interest cost of issuing the Rs 1.35 lakh crorcrecapitalization bonds would neither result in inflation nor push fiscal deficit because of increased economic activities and asset creation even as it incurs an annual interest cost of Rs 8000-Rs9000crore Chief Economic Advisor Arvind Subramanian said in a lecture at Delhi University a day after announcement of the bond issue. Delivering the lecture Subramanian said under the arihant competition in focus current affairs

arihant competition in focus monthly magazine

 arihant competition in focus monthly magazine

arihant competition in focus monthly magazine published this article page no 298

The significance of the bond issue can also be gauged from the Insolvency and Bankruptcy Code angle. The Code which was drafted last year is now being used for resolution of about 300 accounts. Of these 12 are the big ticket NPA accounts worth about Rs 2.25 lakh crorc which were referred by the RBI to National Company Law Tribunal (NCLT) in June 2017. With so many corporate debtors going in for resolution the possibility of explaining hair cut to be borne by the banks cannot be denied. arihant competition in focus monthly magazine

arihant competition in focus monthly magazine

 arihant competition in focus monthly magazine

arihant competition in focus monthly magazine published this article page no295

Now it remains to be seen whether the government will allow the lenders to sell the bonds in the secondary market to do so. Since the contours of the bond issue are still being worked upon by the Ministry of Finance one has to wait for the announcement to understand the minute details. However it may be argued that in both the scenarios it is going to be beneficial for the banks as it enhances their capital base. Also in a scenario wherein government allows the banks to trade the bonds in the secondary market it will help them raise money and bolster their loan book. arihant competition in focus monthly magazine