“This kind of private lending has a role. “As one of the conditions, lenders lay down that these properties (against which allotment letters are given) are the first to be sold,” said Lakhani. However, it would be far more difficult now with Securities and Exchange Board of India (Sebi) asking promoters of companies to reveal all direct and indirect lien on shares. “Borrowers grudgingly accept structured products featuring safety nets, higher yields, and enabling provision for enforcing securities by lenders. They have no option...One really doesn’t know whether it would land them in a bigger debt trap than they can come out from,” he said.

Source: Economic Times July 03, 2019 02:39 UTC