O.P. Jindal Global University Jindal Global Law School End Term Examination – 2022

Course Name                                                              : Banking and Finance Law

Course Code                                                               : L-CM-0008-U

Session                                                                        : June/July 2021-22 (Cohort 4)

Duration/Submission                                                 : 27 Aug 2022 – 11.59 P.M.

Maximum Marks                                                        : 30

This question paper has three (3) pages (including this page).

Instructions to students:

• This is a take-home examination.
• Please do not write your name, JGU Id or any identification text inside your submission document.
• Please ensure that your submission strictly adheres to JGU plagiarism/ Similarity guidelines.
• Sharing of the answer scripts with each other is not permissible unless results are declared.
• The submissions submitted as drafts on UMS will not be considered for evaluation. Students should make sure the submission submitted on UMS are properly submitted.
• Submission must be done on UMS only – do not email your answer sheet.
• Ensure the submissions are done in a compatible file format pdf, xls, docs etc.
• Kindly adhere to the duration/timelines of the examinations. Submission outside the permitted time-window may attract marks based penalty, grade drop or non-evaluation.
• This paper contains 2 questions carrying 15 marks each: both are compulsory.
• The maximum word limit for each sub-part of each question is provided against the relevant sub-part. Footnotes (if any) shall be excluded from the word limit. Footnotes (if any) must be used in the standard manner and not for any substantive parts of the answer or to indirectly bypass the word limit).
• Provide a brief introduction with the background and/ or basic concepts before setting out the analysis required by the question. Where relevant, include any readings /research, case studies/ examples & case law. As this is a Master’s level assessment, students are expected to not merely replicate class notes / study material provided to them, but also show some original thoughts, inputs and research in their answers.

Warning: Plagiarism or other unfair means in any form is prohibited. Anyone found using unfair means will be penalized severely.

ANSWER ALL QUESTIONS IN THIS PAPER

1. Speaking at an event in December 2021, Mr. KV Kamath, chairman of National Bank for Financing Infrastructure and Development (NaBFID) made, inter alia, the following remarks:

“We now have a digital mindset at all levels, there is the rise of technology and the bank customers are now receptive to change … I would say that disruptions are on us and it is for us to see how quickly we can change. Change is not always at the cost of money, it may cost much more than money if you don’t take decision …”

Consider the role of the All India Financial Institutions (of which NaBFID is the newest and expected to commence operations in FY 2023) and answer the following:

(a) Provide an overview of each of the four AIFIs that are already operational (i.e., NABARD, EXIM Bank, SIDBI and NHB) including the historical background, statutory basis and their role and function (give examples of activities connected to their role & function that they have undertaken most recently). [12 marks] (1200 words)

(b) In your view, do AIFIs still have a role to play in a globalized Indian economy and should they continue to have a role in the future? Give reasons to justify your opinion [3 marks] (300 words)

            [TOTAL: 15 marks]

• The experienced project finance lawyer Philip Fletcher, writing in a legal guide, noted that:

“Project finance lawyers must have mastery not only of the same legal and commercial skills … ranging from the drafting of sophisticated financial covenants to creating security over every class of asset imaginable. They must also delve into assessing how large industrial facilities will be able to generate sufficient revenues to service their debt obligations over periods that often extend to decades … The documentation to be considered encompasses not only the usual realms of finance and security documents found in other forms of secured lending, but also a multitude of complex commercial contracts, permits, and licences that frame the terms under which the underlying project will operate…”

Consider the above statement, and provide your response to the following:

(a) Assume you are a project finance lawyer. For the benefit of a new legal associate that you have hired (who has not been taught project financing in law school), explain what project financing is (provide an overview and explain the key concepts). Also provide a summary of the key differences between corporate financing (standard business (term) loans) and project financing. [12 Marks]

(b) For the further benefit of your new legal associate, provide a brief overview of the documents you would expect to draft (including in respect of security) and describe in detail the documents that are specific to a project financing transaction. [3 Marks]

[TOTAL 15 marks]

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