ENTREPRENEURS DEBT RECOVERY MANAGEMENT.pptx

ENTREPRENEURS DEBT RECOVERY MANAGEMENT

1. RRR CHAMBERS Email ID- [email protected]

2. Welcome Entrepreneurship Ecosystem and Opportunities for Start-Ups 28 Th March 2023. RRR Chambers - [email protected]

3. Coverage: Startups Classification of debt Debt recovery/resolution laws IBC 2016 RRR Chambers - [email protected]

4. Creativity- Bullet Funding 4 RRR Chambers - [email protected]

5. Creativity-IPR-Intangible Assets RRR Chambers - [email protected]

6. DEBT AND DEFAULT RRR Chambers - [email protected]

7. ‘Debt’ Debt is an amount of money borrowed by one party from another. Debt is used by many corporations and individuals as a method of making large purchases that they could not afford under normal circumstances. A debt arrangement gives the borrowing party permission to borrow money under the condition that is to be paid back at a later date, usually with interest. RRR Chambers - [email protected]

8. Improper selection of an entrepreneur Deficient analysis of project viability Inadequacy of collateral security/Equitable Mortgage against loan Unrealistic Terms and Schedule of Repayment Lack of Follow up Measures Default due natural calamities Defaults of loan RRR Chambers - [email protected]

9. Types of Loan Defaults Loan Default Means a borrower has not fulfilled the conditions in repayment of a debt Debt Service Default Technical Default Sovereign Default Strategic Default RRR Chambers - [email protected]

10. Defaults Classification Defaults are classified into two baskets – Soft and Hard. The borrowers are segregated into baskets on the basis of the time period of default. The baskets are usually on the basis number on the basis of number of days. The soft basket is when default is at usually below 90 days. The default shifts into hard asked if it is beyond 90 days. NO PAYMENTS FOR 90 DAYS RRR Chambers - [email protected]

11. DEBT RECOVERY MANAGEMENT IN BANKS A debt from a loan, credit line or accounts receivable that is recovered either in whole or in part after it has been written off or classified as a bad debt RRR Chambers - [email protected]

12. Collection supervisors had to run Reports and Queries to identify delinquent customer accounts Download customer accounts into spreadsheets Manually segment customer accounts depending on customer category Run separate set of Reports and Queries for each customer segment to prioritize customer accounts Collection specialists through paper print-outs or by forwarding spreadsheets to process Manually Segment Download Prioritize Accounts Distribute Accounts Collections Process RRR Chambers - [email protected]

13. DEBT RECOVERY MANAGEMENT MANAGEMENT Recovery agents LAWS RRR Chambers - [email protected]

14. Engagement of Recovery Agency The Bank may utilize the services of recovery agencies for collection of dues and repossession of securities. Recovery agencies will be appointed as per regulatory guidelines issued in this regard. The name and address of all Recovery Agencies on the Bank’s website for information. Only recovery agencies from the approved panels will be engaged by the Bank. Employees of the recovery agencies, after completing the mandatory Debt Recovery Agent (DRA) training. Will be issued valid ID cards authorizing them to collect dues from the Bank’s customers. RRR Chambers - [email protected]

15. Debt recovery /Resolution laws

16. Recovery /Resolution laws Debt Recovery Tribunal Act 1993 The Securitization And Reconstruction of Financial Assets And Enforcement of Security Interest Act, 2002 Civil procedure code1908 Micro, Small and Medium Enterprises Development Act, 2006 Insolvency and Bankruptcy code 2016 RRR Chambers - [email protected]

17. Who can file a case? Through ? Fee to file a case with DRT ? RRR Chambers - [email protected]

18. INSOLVENCY BANKRUPTCY CODE 2016

19. Any Company incorporated under the Companies Act, 2013 or under any provisions Any other Company governed by any Special Act Any LLP incorporated under the LLP Act, 2008 Any other body, as notified by the Central Government Partnership Firms Individuals AP P LICABI L ITY RRR Chambers - [email protected]

20. 20 Objectives ?

21. 21 OB J ECTIVES The objective of the new law is to promote entrepreneurship, availability of credit, and balance the interests of all stakeholders by consolidating and amending the laws relating to reorganization and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner IBC proposes a paradigm shift from the existing ‘Debtor in possession’ to a ‘Creditor in control’ regime IBC aims at consolidating all existing insolvency related laws as well as amending multiple legislation including the Companies Act. RRR Chambers - [email protected]

22. 22 RRR Chambers - [email protected]

23. 23 What are the crux points of IBC

24. 24 RRR Chambers - [email protected]

25. 25 Why IBC for India ?

26. 26 IBC FOR INDIA India currently ranks 136 out of 189 countries in the World Bank's index on the ease of Resolving Insolvencies. Ease of Doing Business The Code promises to bring about far-reaching reforms with a thrust on Creditor Driven Insolvency Resolution. It aims at early identification of financial failure and Maximizing The Asset Value Of Insolvent Firms. RRR Chambers - [email protected]

27. Adjudicator 27 ROLE PL A YERS National Company Law Tribunal Debt Recovery Tribunal Corpo r ate Entities Companies /LLPs Non-Corporate Entities Individuals and Partnership Firms RRR Chambers - [email protected]

28. 28 What if the resolution process fails?

29. 29 INSOLVENCY is the inability of a person or corporation to pay their bills as and when they become due and payable. LIQUIDATION is the process of winding up a corporation or incorporated entity. BANKRUPTCY is when a person is declared incapable of paying their due and payable bills. RRR Chambers - [email protected]

30. 30 RRR Chambers - [email protected]

31. 31 What is the role of Director/ Entrepreneur?

32. 32 RRR Chambers - [email protected]

33. 33 THANK YOU RRR Chambers - [email protected]