Mark to Market

Yes Bank, fourth largest bank in the Indian banking system recently faced criticism for loss in quarterly results.  With Moody considering a downgrade, The situation was roughly taken by the market as well resulting in a 20% loss in share price and 57% since March, when New CEO took up.  Loss is mainly driven by non-tax provisions in books. Due to exposure of 20000Cr. to DHFL, Anil Ambani group, and Essel group.  The bank’s tier 1 capital has fallen to 8.4% from 9.7% earlier. To support the buffer bank plans to raise a capital of $1.2 billion in private and public share sale.  With Analysts downgrades “the challenging times” are still not over for the bank.

Insolvency and Bankruptcy Code, 2016 (referred to as IBC) which is considered as the biggest insolvency reform, is a central Act enacted for reorganization and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximization of the value of assets of such persons. The purpose of this act can be divided into the following two goals: 1.     Making sure that the insolvency proceedings can be completed within a minimum amount of time. 2.     Making sure that the financial risks to foreign investors are decreased. Benefits of IBC To this day, the IBC has recovered more than 3 lakhs crores of debt. Out of which: 1.  1.2 lakhs crores at the pre-admission stage: even before the insolvency petition was admitted 2.  1.2 lakhs crores from resolved cases: Cases where the insolvency has been resolved. 3.  60,000 crores from Non-Performing Assets. As a result of this, with rank 77, India now ranks among the top 100 countries a