The writer is a Senior Research Fellow at Shardul Amarchand Mangaldas & Co
Pratik Datta writes: Their introduction in India promises to usher in a modern era of distressed debt investing
🔴 Pratik Datta writes: It would compel states to either reform their financially distressed discoms or yield to privatisation efforts through insolvency resolution.
Such a bank has a temporary purpose, and need not exist in perpetuity.
India’s tryst with Chinese FDI during Covid underlines importance of identifying national security threats from foreign investment. A dedicated law is needed to handle such issues.
Adopting the polycentricity test within constitutional jurisprudence would help sustain the legitimacy of judicial review while retaining the accountability of technocratic institutions such as the central bank.
If only asset reconstruction companies are allowed to directly participate in IBC resolutions by infusing equity, they could emerge as the most efficient vehicle for turning around distressed Indian businesses.
It may be prudent for the RBI to publish an empirical study on the impact of CEO tenure on bank performance before translating this proposal into an enforceable regulation.
India’s tryst with DRs began with the first scheme in 1993. Liberalisation gave a major boost to export-oriented services sector companies. Given their high growth potential, they could easily raise equity capital.