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10 August 2017
The
Rajya Sabha on Thursday passed the Banking Regulation (Amendment) Bill, 2017,
which will enable the government to empower the RBI to direct lender banks to
act against big loan defaulters. The Total
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The
bill, which amends the Banking Regulation Act, 1949, will replace the Banking
Regulation (Amendment) Ordinance, 2017. The
Total Investment & Insurance Solutions
The
Lok Sabha had passed the bill earlier. The
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Introducing
the bill in the Rajya Sabha, Union Finance Minister Arun Jaitley said the delay
in the legislation to empower the Reserve Bank of India (RBI) to direct lenders
to act against big defaulters was hindering the banks' capacity to support
growth.
Once
it becomes a law, the central government may authorise the RBI to issue
directions to the banks to initiate proceedings in case of loan repayment
default. These proceedings would be under the Insolvency and Bankruptcy Code,
2016.
The
RBI may, from time to time, issue directions to banks for resolution of
stressed assets and may specify authorities or committees to advise banks on
resolution of stressed assets.
Stressed
assets are loans where the borrower has defaulted in repayment or where the
loan has been restructured (such as by changing the repayment schedule).
The
bill inserts a provision to state that it will also be applicable to the State
Bank of India, its subsidiaries, and Regional Rural Banks.The Total Investment & Insurance Solutions
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