The Sebi move came against the backdrop of the government and the RBI stepping up efforts to tackle the menace of bad loans that are estimated at more than Rs 8 lakh crore
Barely a day before it was to come into effect, the Securities and Exchange Board of India (Sebi) has put on hold a directive that made it mandatory for listed companies to report any loan defaults to stock exchanges.
The implementation of the directive has been put off until further notice, the markets regulator said in a statement late Friday night.
Sebi had last month directed listed firms to disclose, starting October 1, any payment defaults to banks and financial institutions within one working day of such a miss.
The move came against the backdrop of the government and the Reserve Bank of India stepping up efforts to tackle the menace of bad loans that are estimated at more than Rs 8 lakh crore.
“Corporates in India are even today primarily reliant on loans from the banking sector. Many banks are presently under considerable stress on account of large loans to the corporate sector turning into stressed assets, non-performing assets (NPAs). Some companies have also been taken up for initiation of insolvency and bankruptcy proceedings,” Sebi had said.
The new disclosure norms would have addressed this critical gap in the availability of information to investors.
Currently, Sebi’s listing guidelines require specific disclosures on delay or default in payment of interest or principal on debt securities, including listed non-convertible debentures, listed non-convertible redeemable preference shares and foreign currency convertible bonds.
Similar disclosures are not stipulated with regard to loans from banks and financial institutions.
BAD LOANS
- The Sebi move came against the backdrop of the government and the RBI stepping up efforts to tackle the menace of bad loans that are estimated at more than Rs 8 lakh crore.
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