Insolvency resolution: Govt notifies changes in Banking Regulation Act

The Act gives power to the RBI to issue directions to banks to initiate insolvency resolution process to recover bad loans.

The Government of India has notified changes in the Banking Regulation (Amendment) Act, 2017.  
 
The Act gives power to the RBI to issue directions to banks to initiate insolvency resolution process to recover bad loans.
 
The Parliament had approved the Act in the monsoon session. 
 
It replaced the ordinance, which was promulgated in May
 
After the ordinance was promulgated, the central bank identified 12 accounts each having more than Rs 5,000 crore of outstanding loans and asked banks to initiate resolution proceedings against them.
 
Under the Banking Regulation (Amendment) Act, 2017, the RBI can also can appoint authorities or constitute committees to advise banks in bad loans cases. 
 
The country's banking sector is reeling with non-performing assets (NPAs) worth over Rs 8 lakh crore, of which Rs 6 lakh crore is with public sector banks (PSBs).
 
 
Source: BusinessLine

Event date: 
Monday, August 28, 2017

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