{"id":35709,"date":"2018-11-01T11:29:25","date_gmt":"2018-11-01T05:59:25","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=35709"},"modified":"2018-11-01T11:29:25","modified_gmt":"2018-11-01T05:59:25","slug":"amended-banking-regulation-bill-gets-elders-nod","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/amended-banking-regulation-bill-gets-elders-nod\/","title":{"rendered":"Amended Banking Regulation Bill gets elders\u2019 nod:"},"content":{"rendered":"<p><a href=\"http:\/\/www.thehindu.com\/todays-paper\/tp-national\/amended-banking-regulation-bill-gets-elders-nod\/article19468585.ece\"><span style=\"font-weight: 400;\">Amended Banking Regulation Bill gets elders\u2019 nod<\/span><\/a><span style=\"font-weight: 400;\">: <\/span><\/p>\n<p><b> Context:<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Parliament passes bill empowering RBI to recover NPAs<\/span><\/p>\n<p><b>Introduction:<\/b><\/p>\n<p><span style=\"font-weight: 400;\">The Rajya Sabha on Thursday passed the Banking Regulation (Amendment) Bill, which empowers the Reserve Bank of India to issue instruction to the banks to act against major defaulters.<\/span><\/p>\n<p><b>Background:<\/b><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">The bill, earlier passed by the Lok Sabha, will replace the Banking Regulation (Amendment) Ordinance, 2017.<\/span><\/li>\n<li><span style=\"font-weight: 400;\"> \u00a0<\/span><span style=\"font-weight: 400;\">It empowers the Reserve Bank of India to issue instructions to PSBs to act against major defaulters.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">The measure allows the RBI to initiate insolvency resolution process on specific stressed assets.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Finance Minister Arun Jaitley said there was nothing wrong in banks giving out loans and trying to recover them. It was only on the strength of the banking finance that businesses expanded, jobs were created and the economy moved on.<\/span><\/li>\n<\/ul>\n<p><b>Key points:<\/b><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">The RBI would also be empowered to issue other directions for resolution, appoint or approve for appointment, authorities or committees to advise the banking companies for stressed asset resolution.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Last month, the RBI identified 12 large loan defaulters who account for 25 per cent of the total NPAs, or bad loans, in the banking sector.<\/span><\/li>\n<\/ul>\n<p><b>Non-performing assets(NPA):<\/b><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\"> \u00a0<\/span><span style=\"font-weight: 400;\">NPAs stood at Rs 6.41 lakh crore by March this year. They were growing because of accumulated interest. Along with the stressed assets, they amounted to over Rs 8 lakh crore.<\/span><\/li>\n<li><span style=\"font-weight: 400;\"> \u00a0\u00a0<\/span><span style=\"font-weight: 400;\">NPAs of banks have risen to over Rs 9 lakh crore and the RBI is now being given power to refer these cases to the Insolvency and Bankruptcy Board.<\/span><\/li>\n<\/ul>\n<p><b>Insolvency law<\/b><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\"> \u00a0<\/span><span style=\"font-weight: 400;\">The law provides for a window of 180 days for debtors to settle the matter or face eviction and subsequent takeover of management by debt reconstruction companies, things had started improving<\/span><\/li>\n<li><span style=\"font-weight: 400;\"> \u00a0<\/span><span style=\"font-weight: 400;\">Under the bill, the central government may authorise the RBI to issue directions to any banking company to initiate insolvency in respect of a default under the provision of the Insolvency and Bankruptcy Code.<\/span><\/li>\n<li><span style=\"font-weight: 400;\"> \u00a0<\/span><span style=\"font-weight: 400;\">It also has provisions empowering the RBI to issue directions to banks for resolution of stressed assets.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">The sectors most responsible for the accumulated NPAs are steel, power, textiles and infrastructure<\/span><\/li>\n<\/ul>\n<p><b>Need for legislation:<\/b><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\"> \u00a0<\/span><span style=\"font-weight: 400;\">The capacity of banks to lend money to small creditors is being impacted, the growth is impacted.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Public sector banks were hit the most as big industrial and infrastructure programme were supported by them in the hope that there would be further expansion<\/span><\/li>\n<li><span style=\"font-weight: 400;\"> \u00a0<\/span><span style=\"font-weight: 400;\">It also performed other functions like public debt management.<\/span><\/li>\n<li><span style=\"font-weight: 400;\"> \u00a0<\/span><span style=\"font-weight: 400;\">Earlier rules of debt recovery were time consuming. The new parallel mechanism was more effective.<\/span><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Amended Banking Regulation Bill gets elders\u2019 nod: Context: Parliament passes bill empowering RBI to recover NPAs Introduction: The Rajya Sabha on Thursday passed the Banking Regulation (Amendment) Bill, which empowers the Reserve Bank of India to issue instruction to the banks to act against major defaulters. Background: The bill, earlier passed by the Lok Sabha,&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/amended-banking-regulation-bill-gets-elders-nod\/\">Continue reading <span class=\"screen-reader-text\">Amended Banking Regulation Bill gets elders\u2019 nod:<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[555],"tags":[],"class_list":["post-35709","post","type-post","status-publish","format-standard","hentry","category-test-1","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704856696},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/35709","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=35709"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/35709\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=35709"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=35709"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=35709"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}