The Central Government has, on 04.05.2017 come out with the Banking Regulation (Amendment) Ordinance, 2017, giving more powers to the Reserve Bank of India (RBI) to deal with non-performing assets. According to the present Ordinance, RBI can effectively ask banks to sit down with defaulters and reach a settlement as part of the package, aimed at accelerating a resolution of the Rs9.64 trillion in bad loans choking the banking system. The NPA problem is, to a large extent, confined to 50 large loan defaulters.
Under the Ordinance.,
1) The government may authorise the Reserve Bank of India (RBI) to issue directions to banks to initiate insolvency proceedings against defaulters under the bankruptcy code.
2) RBI on its own accord can issue directions to banks for resolution of stressed assets.
3) RBI may form committees with members it can choose to appoint to advise banks on resolution of stressed assets.
Under the Ordinance.,
1) The government may authorise the Reserve Bank of India (RBI) to issue directions to banks to initiate insolvency proceedings against defaulters under the bankruptcy code.
2) RBI on its own accord can issue directions to banks for resolution of stressed assets.
3) RBI may form committees with members it can choose to appoint to advise banks on resolution of stressed assets.
