Norms being tightened

The Centre is working out a fool-proof mechanism with built-in safeguards to ensure that its counter-guarantee to private power developers does not turn out to be a complete give-away as is generally being perceived. Among the measures being incorporated in the counter-guarantee is a clause detailing the special circumstances under which the Centre would stand guarantee for repayment of the external commercial borrowings of private power developers. There would also be a tripartite agreement between the Centre, the state government and the RBI to guard against any laxity by the state electricity board.

SEBI for changes in listing agreements

The Securities and Exchange Board of India is planning to instruct stock exchanges to amend the listing agreements entered into by them with companies to ensure continuing disclosures. SEBI will soon be writing to the stock exchanges to amend their listing agreements, thus binding corporates to publish financial statements on a quarterly basis accompanied by cash flow projections. The proposal also envisages companies detailing the source of funds and its usage. Progressively, SEBI plans to persuade companies to publish audited financial statements instead of the present practice of putting out unaudited results.

Backtracking by States worries RBI

The Reserve Bank of India has expressed serious concern over the tendency of state governments to backtrack on the guarantees given by them on bank loans to the state public sector undertakings. The reluctance of these governments is having an adverse impact on the balance sheets of banks at a time when they are making all-out efforts to reduce their nonperforming assets.

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