Archive for October 4th, 2021

RBI supersession of Board of Directors of SREI Infrastructure Finance and SREI Equipment Finance

October 4, 2021

India’s financial sector mess continues. Markets had long expected SREI Infra Finance to go under and this has indeed happened.

RBI has superseded the Board of two SREI companies:

In exercise of the powers conferred under Section 45-IE (1) of the Reserve Bank of India Act, 1934, the Reserve Bank has today superseded the Board of Directors of Srei Infrastructure Finance Limited (SIFL) and Srei Equipment Finance Limited (SEFL), owing to governance concerns and defaults by the aforesaid companies in meeting their various payment obligations. Shri Rajneesh Sharma, Ex- Chief General Manager, Bank of Baroda has been appointed as the Administrator of the aforesaid companies under Section 45-IE (2) of the RBI Act.

The Reserve Bank also intends to shortly initiate the process of resolution of the above two NBFCs under the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules, 2019 and would also apply to the NCLT for appointing the Administrator as the Insolvency Resolution Professional.

 

Posted in Indian Economy/Financial Markets | Leave a Comment »

5 years of Insolvency and Bankruptcy Code – 2

October 4, 2021

The Insolvency and Bankruptcy Board of India was established on 1st October, 2016 under the Insolvency and Bankruptcy Code, 2016 (Code).

IBC and IBBI celebrated 5 years recently. IBBI released several documents/videos to mark the occasion:

Chairperson of IBBI – M.S.Sahoo – also completed his 5-year tenure. The government has not yet appointed a new chair which does not look good for an institution like IBBI.

Posted in Economics - macro, micro etc, Financial Markets/ Finance, Indian Economy/Financial Markets | Leave a Comment »

Decrypting new age International Capital Flows via bitcoins

October 4, 2021

Clemens Graf von Luckner, Carmen M. Reinhart & Kenneth S. Rogoff in this NBER paper analyse capital inflows via a bitcoin exchange. They find that bitcoins are being used significantly in foreign capital inflows:

This paper employs high frequency transactions data on the world’s oldest and most extensive centralized peer-to-peer Bitcoin market, which enables trade in the currencies of more than 135 countries. We develop an algorithm that allows, with high probability, the detection of “crypto vehicle transactions” in which crypto currency is used to move capital across borders or facilitate domestic transactions.

In contrast to previous work which has used “on-chain” data, our approach enables one to investigate parts of the vastly larger pool of “off-chain” transactions.

We find that, as a conservative lower bound, over 7 percent of the 45 million trades on the exchange we explore represent crypto vehicle transactions in which Bitcoin is used to make payment in fiat currency. Roughly 20 percent of these represent international capital flight/flows/remittances.

Although our work cannot be used to put a price on cryptocurrencies, it provides the first systematic quantitative evidence that the transactional use of cryptocurrencies constitutes a fundamental component of their value, at least under the current regulatory regime.

Hmm..

Posted in Academic research & research papers, Central Banks / Monetary Policy, Economics - macro, micro etc, Financial Markets/ Finance | Leave a Comment »

Ideas of Adam Smith and how they apply to India

October 4, 2021

In this superb podcast, Shruti Rajagopalan and Pratap Bhanu Mehta discuss the ideas of Adam Smith and how they apply to India. There is a transcript of the conversation as well.

Mehta’s PhD dissertation was on Adam Smith. Shruti nicely weaves the coversation around how/whether Smith is relevant for India and under what setting. So many threads here..

Posted in Academic research & research papers, Discussion, Indian Economy/Financial Markets | Leave a Comment »

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