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.


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