Banking Regulation Act -2017
Highlights of the Ordinance :
The Ordinance amends the Banking Regulation Act, 1949 to insert provisions for recovery of outstanding loans NPA (Non- Performing Asset) . Under these provisions, the central government may authorize the Reserve Bank of India to direct banks to initiate recovery proceedings against loan defaulters.
- These recovery proceedings will be under the Insolvency and Bankruptcy Code, 2016. The Code provides for a time-bound process to resolve defaults by either
(i) restructuring a loan (such as changing the repayment schedule), or
(ii) liquidating the defaulter’s assets.
- The RBI may from time to time issue directives to the banks for resolving stressed assets. ( Stressed assets are loans where the borrower has defaulted on repayment, or loans which have been restructured.)
- The RBI may specify authorities or committees to advise banks on resolving stressed assets. Members on these committees will be appointed or approved by the RBI.