Lenders Law

On July 29, 2025, RBI released "Investment in AIF Directions, 2025" —applicable to NBFCs and other Regulated Entities (REs). A closer legal look reveals a strong regulatory intent: curb indirect evergreening and tighten capital discipline. Key highlights: 1️⃣ 10% Cap per RE & 20% Collective Cap across all REs in an AIF scheme. 2️⃣ If an RE contributes >5% to an AIF that makes non-equity investments in RE’s own debtor company, RE must make 100% provision to the extent of its proportionate indirect exposure. 3️⃣ If an RE subscribes to subordinated units of an AIF, the investment must be entirely deducted from capital funds (Tier-1 & Tier-2). 🔍 Legal and compliance teams at NBFCs must now revisit: - Their AIF investment approval matrices; - Existing exposures vis-à-vis related-party/indirect lending; - Tier-1 capital impact under the revised approach. This is not just a compliance update — it’s a strategic recalibration of how structured exposure via AIFs is view...

When ChatGPT writes your caption… who owns it?  That’s just one of the questions I tackled at LexDita 2025 while speaking on AI-generated content & IP.  From memes to music to machine-written code — the lines around ownership, originality, and liability are getting blurry (and legally messy).   This was more than a welcome address — it was a deep dive into a subject I’ve been reflecting on for a while.  Here’s the full talk if you're curious about where the law may be headed-

Background: Regulated entities (REs) perform various roles in co-lending transactions from sourcing activities to extension of loan facilities to borrowers, and RBI has issued separate guidelines covering co-lending by banks with NBFCs to priority sector, guidelines on outsourcing of financial services, however, the regulatory frameworks do not cover all possible categories of co-lending arrangements (CLA).   On 9 th April, 2025, the Reserve Bank of India has issued comprehensive draft framework [1] to cover all market trends related to different types of CLA entered by financial entities. The said directions stipulate regulatory norms and guidance for REs, and also seek to address prudential issues.   Post receipt of comments from industry experts, financial sector, legal professionals, academicians, etc, RBI has proposed to issue directions that will govern co-lending arrangements by REs, which shall come into force from date of its publication.   Appli...

  In the recent ruling of Home Kraft Avenues vs Jayesh Sanghrajka and Anr . [1] , the National Company Law Appellate Tribunal has held that the creditor will be treated as “secured” during corporate insolvency resolution process (CIRP) despite the charge being unregistered under Section 77 of Companies Act 2013. In this article, the author has tried to analyse the said ruling. Provisions relied upon by NCLAT: The Hon’ble NCLAT relied upon the language stipulated in Section 77(3) of Companies Act 2013, reproduced as follows: “Notwithstanding anything contained in any other law for the time being in force, no charge created by a company shall be taken into account by the ‘liquidator’ or any other creditor unless it is duly registered under subsection (1) and a certificate of registration of such charge is given by the Registrar under sub-section (2).” Considering the aforementioned, the Hon’ble Appellate Tribunal observed that the said section casts an obligation only upon “l...