ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Intellectual Property as Collateral

The scope of using intellectual property as collateral is discussed. Through examples, it is shown here that, owing to its volatile and dynamic nature, IP is not a reliable collateral. There is a pressing need for proper methods of valuation and registration so that confidence in IP as collateral is enhanced.

Distortions in Land Markets and Their Implications for Credit Generation in India

Data shows that land is collateral in a large proportion of loans in India. Yet, the several structural, regulatory, and information-driven distortions that afflict Indian land markets force lenders to adopt conservative policies ex ante, affecting both the availability of credit and the collateralisation of land. The paper examines some of these distortions and highlights their significance to the current debate on reforming bankruptcy framework in India. The first part of the paper discusses structural, regulatory, and informational gaps that limit lenders’ ability to lend against land as well as recovery after default. In the second part, some opportunistic and structural reforms in the land markets that could effectively monetise land in credit markets have been proposed.

Determinants of Recovery of Stressed Assets in India

There have been signs of stress in the balance sheets of banks in an environment of increasing uncertainties and a fragile global economy. Weakening loan recovery rates not only forces banks to face the burden of higher provisions and limits their lending capacity, it also diminishes their profitability and solvency. Examining the determinants of recovery of defaulted loans by banks in India, the need for a stronger and effective insolvency regime is felt so as to improve the debtor-creditor relationship and credit environment. The importance of the presence of collateral, the type of collateral used, and a conducive macroeconomic environment towards recovery of bad loans are highlighted. There is a need for strengthening banks' credit appraisal system. Access to alternative resources facilitates loan recovery, highlighting the need for further development of capital market as a source for adequate resources for borrowers.
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