Rajya Sabha passes Banking Regulation Bill to resolve non-performing assets

New Delhi: The Rajya Sabha on Thursday passed the Banking Regulation (Amendment) Bill, 2017, which empowers the Reserve Bank of India (RBI) to resolve stressed assets clogging the banking system.

The Banking Regulation (Amendment) Bill, 2017, seeks to amend the Banking Regulation Act, 1949 and replace the Banking Regulation (Amendment) Ordinance, 2017, which was promulgated in May this year.

The measure allows the RBI to initiate insolvency resolution process on specific stressed assets.

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.

Non-performing assets of banks have risen to over Rs 9 lakh crore and now RBI is being given power to refer the cases to Insolvency and Bankruptcy Board.

Moving on fast-track, the RBI had in June identified 12 large loan defaulters who account for 25 percent of the total bad loans in the banking sector.

Action under the Insolvency and Bankruptcy Code has already begun in certain cases, including Essar Steel, Bhushan Steel and Bhushan Power & Steel.

With Agency Inputs