M/s.Indian Bank V/S Mr.J.Paramanandam & ors

IA 1506/11 (adv.hearing); counter filed.  Heard both sides. This IA is allowed.

IA 1461/11 (impleading petition);  Heard both sides. This IA is allowed.

IA 150711 (to release the title deeds) : R3 to R12 are given up.  Notice given to R1 and R2.

Ld.  Counsel  appearing on behalf of Ld. Counsel Shri Thyagarajan for the petitioner took this Tribunal through various averments made in the affidavit filed in support of the petition and stated that the ‘LIS’ having come to an end in this matter the petitioner is entitled to get back the original title documents that are presently with the bank. 

Ld.  Counsel Shri Kasturi Rangan appearing on behalf of R1 stated that the matter has been settled and that no prejudice would be caused if the original title documents are released after the completion of the payment of Rs.1.00 crore by the first respondent to the bank as agreed to and prayed that this petition may be dismissed.

Ld.  Counsel Shri Balasubramaniam appearing on behalf of the respondent bank stated that the terms of compromise are yet to be fulfilled and that this Tribunal may not release the original title documents at this juncture though the matter has been settled.

Heard the Ld.  Counsel.

In view of the facts and circumstances of the case more particularly in view of the fact that the petitioner viz. Shri A. Ramadas Rao has fulfilled the requirement of the respondent bank in this case it would be appropriate if the following order is passed.

“The Chief Manager, ARMB-I, Indian Bank Zonal Office, Indian Bank Circle Office Building, Chennai is hereby directed to return the original title documents relating to the property situated at No.29, Senthamangalam Village, Sunguvar Chatram Firka, Sriperumbudur Taluk, Kancheepuram District registered as Document. No.418 of 2011 in the office of Sub-Registrar, Wallajabad within a period of one week from today.”

This IA is disposed of accordingly,

RA 28/11 : Call on 9.1.2012.

This order was issued by the Honble Chair Person Of DRAT Chennai on 14th Dec 2012

Pain not yet over: SBI refers 3 cos to CDR for Rs 3430cr

 
Saikat Das :Moneycontrol :Tue, Feb 21, 2012 at 12:04  

India's largest lender the State Bank of India (SBI) referred three loan accounts including Bharati Shipyard (BS), ARSS Infrastructure and Vijai Electricals (VE) to the Corporate Debt Restructuring (CDR) cell. The sum total of credit exposure in these companies would be around Rs 3,430 crore by the bank, sources familiar with the development toldMoneycontrol.com.

The SBI share of loans to BS comes around Rs 1,655 crore out of total exposure at Rs 5,650 crore by a consortium of 15 lenders. The bank lent Rs 773 crore to ARSS out of total loans around Rs 1,600 crore by eight lenders. For VE, it stood at around Rs 1,000 crore as against total Rs 2,200 crore by seven banks.

Credit exposure at a glance:

Company	SBI exposure (Rs in crore)	Total exposure (Rs in crore)
Bharati Shipyard	1,655	5650
ARSS Infrastructure	773	1,600
Vijai Electricals	1,000	2,200

Figures are written on approximate basis.

At the time of CDR proposal submission in the third quarter (Q3), all three companies remained standard assets. Companies have been repaying the interest rate. In anticipation of defaults (before the principal payment becomes due), they were referred to CDR cell. As per RBI norms, a bank has to make provision of 2% on any restructuring of standard asset.

Under the regulatory frame work of the Reserve Bank of India (RBI), the CDR forum caters to an official platform for both the creditors and borrowers to amicably and collectively evolve policies for working out debt restructuring plans.

The CDR cell will make the initial scrutiny of the proposals received from creditors. It happens in two stages: flush stage and final report stage, all related to the economic viability study of the proposal. A loan account can be referred to the CDR cell when at least 75% of the banks (by value) and 60% of creditors (by number) agree to resolve the case under CDR system.

The asset quality concerns cast a shadow on the SBI's Q3 performance. The gross non-performing asset (NPA) ratio stood at 4.61% as against 4.19% in the previous quarter (Q2). The net NPA ratio too rose from 2.04% to 2.22 sequentially.

According to the SBI chairman Pratip Chaudhuri, as much as one fifth of fresh slippages had come from a single company (read Kingfisher Airline).

"So, if you look at the total slippages (net increase) of Rs 6,152 crore, one company alone accounted for around Rs 1,500 crore," the SBI boss said while announcing Q3 results.

However, Chaudhuri did not expect its Air India (AI) exposure turning into an NPA account. The lender has extended a fully secured Rs 1,100 crore loan as cash credit facility to AI.

  

Time to repay

Business Standard / New Delhi

The pressure to redeem foreign-currency bonds makes 2012 a difficult year for India Inc.

During the era of unprecedented liquidity that preceded the financial crisis of 2008, India Inc developed an appetite for hard currency. It was, after all, the easiest way to fuel global aspirations. Interest rate differentials were favourable; and the rupee was relatively stable if not gaining in strength, making the currency risk seem manageable. 

A bull run on Dalal Street meant that foreign currency convertible bonds, or FCCBs, in which the creditor may convert the loan to equity at an agreed price on a given date, were lapped up — as was straightforward external commercial borrowing, or ECB. 

At the end of November 2011, ECB outstanding amounted to $103 billion, about 30 per cent of all external debt; FCCBs outstanding are perhaps $24 billion (the redemption value of FCCBs can differ substantially from issue size). 

Meanwhile, the pre-2008 equations have been turned upside down. Instead of saving, say, six per cent per annum on interest rates, companies with ECB exposure are struggling with 22 per cent rupee depreciation. 

And, in the wake of a bear market, corporations with maturing FCCBs are grimly aware they may have to redeem those bonds for expensive cash, instead of paying in shares.

Both FCCB redemption pressure and ECB debt-servicing commitments will be serious issues in 2012. Worse, quite a few affected companies are stretched in terms of their ability to raise rupee debt, with their promoters having already pledged substantial stakes.

 An advisory by India Infoline says $7.8 billion (redemption value) of FCCBs are due for redemption or conversion by December 2012. The bulk will probably have to be redeemed. The list of FCCB issuers with bonds due in 2012 includes many erstwhile darlings of the stock market. Unfortunately, the downturn has triggered big falls in their market value. Pulling share prices up to conversion levels would require a rally of very unlikely dimensions. 

For instance, it is unlikely that creditors holding $1.18 billion of FCCBs in Reliance Communication will convert to equity at Rs 661 a share when the company’s prevailing market price is Rs 73. Similarly, Suzlon Energy will have to raise $484 million unless bondholders are willing to pay Rs 97 for a share trading at Rs 18. JP Associates, Tata Steel, JSW Steel, Sterling Biotech, Orchid Chemicals and many others face similar conundrums.

Rupee refinancing will be high-cost in many cases. The favourable interest differential evaporates, and currency depreciation looms. Companies like Suzlon, where the promoter has already pledged 70 per cent of shareholding, will additionally have trouble even accessing rupee debt. 


Hybrids like FCCBs are not clearly marked on balance sheets; most, if not all, companies with redemptions due in 2012 have avoided charging costs to the profit and loss account, thereby overstating profits. 


The smart money knows this; the market may thus be merciless even if fancy accounting allows redemption impact to be kept off the accounts. Both the Reserve Bank of India and the Securities and Exchange Board of India should be alert to the possibility that refinancing and redemption pressures could transform a tight corporate liquidity situation into a larger, macroeconomic problem.

Indian exposure to US debt down by $6.3 bn in 2011

Press Trust of India / New Delhi Feb 19, 2012, 16:04 IST

India lowered its exposure to the US government's debt by $6.3 billion (over Rs 30,000 crore) in 2011, even as a few countries like Japan, France, Brazil and the UK enhanced their holding of US treasury bonds.

As per the latest foreign holding data for the US Treasury Bonds, the debt securities issued by the US government, India ranked as the 18th largest foreign holder of these bonds at the end of 2011, down from 15th a year earlier.

While China remains the largest foreign holder of the US treasury bonds, it has lowered its exposure during 2011. A number of other countries such as Taiwan, Hong Kong, Russia, Luxembourg and Singapore also pared their holdings.

However, Japan, the UK, Switzerland, Canada, Germany, Thailand, Ireland, Belgium and South Korea saw their holdings of the US treasury bonds increase during the year.


At the end of December 2011, India held US treasury bonds worth $34.2 billion, as against China's $1.1 trillion.


Other major foreign holders include Japan ($1.04 trillion), the UK ($414.8 billion), Brazil ($206.9 billion) and Taiwan (149.2 billion), while Switzerland and Hong Kong also own treasury bonds worth over $100 billion.


India's holding has declined from $40.5 billion at the end of December 2010, while China's dipped from $1,160 billion to $1100 billion during the year.


The Indian holding increased during the month of December 2011 by about $500 million, but it was on a declining trend for seven straight months prior to that. Between May and November 2011, India's holding fell by about $8.4 billion.


The monthly foreign holding data is released by the US Treasury Department with a delay of about one and half months. The data for January 2012 would be released around the middle of the next month.


The Indian holding stood at a record high level of $42.2 billion in June 2009.


In India, the US treasury bonds are mostly held by the Reserve Bank, while some financial institutions and foreign branches of Indian banks also hold some of these securities.


RBI holds the US treasury securities as part of its foreign exchange reserves portfolio.


The Indian holding started dipping even before the first- ever sovereign rating downgrade of the US in August last year.
It was widely feared that many of the US treasury investors, including foreign entities, would cut their holdings after the downgrade by credit ratings agency S&P. It had cited reasons like inadequate steps by the US to contain ballooning debt for taking the historic action.


Soon after the downgrade, the total debt of the US had moved close to $15 trillion and currently it stands at about $15.5 trillion. Out of this, the US owes nearly $4.7 trillion to foreign countries that hold US Treasury bonds.

Air India lenders give in, approve Rs 18000cr debt recast

   

Source :Press Trust Of India / Mumbai Feb 18, 2012, 00:57 IST

Thirteen-bank consortium also agrees to give Rs 2,200 crore worth fresh working capital loan

Lenders of cash-strapped Air India on Friday approved its corporate debt restructuring plan worth Rs 18,000 crore and decided to provide a fresh cash credit of Rs 2,200 crore. Of the Rs 18,000-crore debt restructuring plan, Rs 7,400 crore worth of non-convertible debentures, guaranteed by the government, would be issued, banking sources said here.

They said the 13-bank consortium, led by State Bank of India, has also agreed to give Rs 2,200-crore worth of fresh working capital loan to the ailing government carrier. The approval by the banks came 10 days after a Group of Ministers, headed by Finance Minister Pranab Mukherjee, decided to allow Air India to raise Rs 7,400 crore by issuing sovereign guaranteed non-convertible debentures.

 The debentures are likely to carry a coupon rate of 8.5-9 per cent and financial institutions may subscribe to these bonds, official sources said. This would be part of the carrier’s financial restructuring plan, which approved by the GoM on February 7. However, the bond issue would have to be cleared by the Union Cabinet, they said.

Official figures show the debt-ridden carrier has loans and dues worth Rs 67,520 crore, of which Rs 21,200 crore is working capital loan, Rs 22,000 crore is long-term loan on fleet acquisition, Rs 4,600 crore is vendor dues, besides an accumulated loss of Rs 20,320 crore. Banks and financial institutions had proposed several measures to beef Air India’s net worth and these were among the measures approved by the GoM, the sources said. Air India’s debt restructuring plan had hit a hurdle after the banks had refused to convert a part of the short- term debt into equity.

Comment....Skeletons pop out with sickening regularity....What to do ?

OUTLOOKINDIA has left a new comment on your post "Auction Sale of Properties by Banks - October & No...": 

The Justice Rate Card 
The Punjab and Haryana High Court has had a history of hushing up cases originating from its judicial chambers, so the Justice Nirmal Yadav case evokes a sense of deja vu. 


Skeletons pop out with sickening regularity but very little action is ever taken.


 A few months before the cash-for-judge scam, the Vigilance Bureau submitted to the Punjab governor and the chief justice of the high court six reports between April 30 and July 25, ’08, which detailed serious malpractices in appointments in the judiciary, manipulations of the high court registry, fixing of cases and similar malpractices in the lower courts. 


The governor handed over the explosive material to the home ministry, while the then HC chief justice Vijendra Jain, sent it to the Chief Justice of India.

The Vigilance Bureau had stumbled on the goings-on while investigating a criminal case which required that the telephones of two people in Punjab be tapped. 


The names of two judges of the high court—Justice Mehtab Singh Gill and Justice H.S. Bhalla—and an additional district judge of Ferozepur, J.S. Bhinder, figured in the reports signed by Vigilance Bureau director Sumedh Singh Saini. 


The bureau is still awaiting sanction to proceed in the matter.

What the bureau reports uncovered besides the alleged role of touts, advocates and judges in fixing cases and “manipulating” the registry of the high court, was the “going rates” for various tasks. 


For instance, according to one of the tapped conversations, Rs 15 lakh was the rate for getting an immediate stay, of which Rs 10 lakh would go to “wade sahib”. 


To get a favourable verdict, a sum of Rs 25 lakh was considered kosher. 


To manipulate the HC registry to get a particular case before a particular bench, Rs 25,000 is the rate. Rates discussed and quoted for appointments to the post of additional district judge range from Rs 35-50 lakh.

Curiously, as soon as Justice Jain retired, the reports went missing from the high court. 


When the new Chief Justice Tirath Singh Thakur wanted to look at them, he had to ask for a fresh copy from the Punjab government

IBA for strict norms on education loans under management quota

Source :BL:PTI:19 Feb 2012

 

Worried over a rise in default on repayment of education loans, the Indian Banks’ Association (IBA) today asked lenders to impose stricter terms on loans given to students getting admission under the management quota.

“Any loan considered by banks for students getting admission under the management quota would be outside the model scheme. Banks may fix appropriate terms and conditions for such loans,” IBA said in guidance note.

IBA expressed concerns that loans given to such students under the model education loan scheme could turn bad as their employment potential is relatively less.

“Banks have reported certain cases where the employment potential would not justify the fee structure for management seats from the point of repayment of the loan being sought,” it said.

Non-performing assets in education loans are as high as 6 per cent. To bring down NPA in education loan, the government is also considering the option of setting up of credit guarantee trust.

As per the model scheme, the banks are not allowed to look at the financial position of parents while evaluating loan to a meritorious student.

It is aimed at meeting all genuine study expenses of a student required to complete the study undertaken. The fee structure varies with type of college or institution within the same state for a given course.

Under management seats, the only requirement is passing the qualifying examination with certain minimum stipulated marks, it said, adding, it is logical to interpret that these seats do not qualify for being called meritorious.

Management seats or management quota refers to the seats in private education institutions for which the management has the discretion to give admission on factors other than merit.