‘Centre open to discuss RBI’s power over regulating PSBs’

‘Centre open to discuss RBI’s power over regulating PSBs’

News:

1. Recently, the Reserve Bank of India (RBI) had raised issues over the lack of powers in regulating state-run lenders.

Important facts:

2. Finance minister Piyush Goyal, said that government is open to discuss these issues.

3. The minister also ruled out government paring its stake in public sector banks (PSBs), saying there is no proposal with the government to lower its ownership in state-run banks to under 51% in 20 of them.

4. Strong opposition came from banking and LIC unions to the government plans to sell its majority stake in the crippled IDBI Bank to LIC.

5. The RBI Governor Urjit Patil blamed that there is lack of power in regulating oversight over government-owned banks.

6. The RBI is facing criticism  over failure in regulating government- owned banks.

7. The RBI governor Urjit Patel said that failure was due to lack of power   for regulating government owned banks.

8. The Sunil Mehta panel recommended to set up an asset management company to resolve smaller loan default of upto Rs 500 crore.

9. Minister further said liquidation can’t be the panacea for all NPAs as there are genuine business failures which need to be resolved.