Cabinet approves amendment in Banking Regulation Act
New Delhi, In a major decision aimed at tackling the mounting non-performing assets (NPAs) of public sector banks, the Union Cabinet on Wednesday night issued an ordinance to amend the Banking Regulation Act that will empower the RBI to go after defaulters.
 
The Cabinet is believed to have approved a policy on bad debts (NPAs), which is being forwarded to President Pranab Mukherjee for approval. The President is likely to clear the ordinance on Wednesday night itself. 
 
"It is an amendment in the Banking Regulation Act. Since Parliament is not in session, it will be issued as an ordinance, which needs President's approval," official sources told IANS.
 
Finance Minister Arun Jaitley gave hints on the decision, but declined to go into the details citing protocol constraints about disclosing something even before the President gets it.
 
Jaitley merely said the Cabinet has taken an "important decision" relating to the banking sector. Media attempts to elicit details from him failed.
 
It is believed that the ordinance would give powers to the Reserve Bank of India (RBI) to take strict action against defaulters while being lenient in cases of genuine business failures.
 
The policy is also likely to contain guidelines regarding public auction of assets of the defaulting companies or individuals.
 
The ordinance assumes significance in the context of the government's attempts to get Vijay Mallya extradited to India. His Kingfisher Airlines had defaulted to the tune of about Rs. 9,000 crore in loans to public sector banks. As banks started hounding him for recovery of their loans, Mallya fled to London last year.
 
Informed sources said the details of the amendments may be disclosed once the President gives his approval. 
 
According to a study, the current financial stress in the Indian banking system is estimated at Rs 11.80 lakh crore, of which gross NPAs of Rs 2.44 lakh crore have been sold to Asset Reconstruction Companies (ARCs).
 
The study was jointly carried out by industry body Associated Chambers of Commerce and Industry of India, Society of Insolvency Practitioners of India and Edelweiss.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
Comments
Suraj Parkash Tuteja
5 years ago
What to do if State Bank of Patiala being reported a specific Cashier dealing in fake currency, but the bank just dumps the matter and does nor provide even a copy of the culprits statement, even aganst RTA Application, Ist, IInd, an appeals, and even the final appeal is kept dumped for over an year. Bank does not provide any Invetstigation report, and for the statement of the culprits, bank insists its
is a personal confidential matter. What to do if State Bank of Patiala being reported a specific Cashier dealing in fake currency, but the bank just dumps the
matter and does nor provide even a copy of the culprits statement, even against
RTA Application, Ist, IInd, an appeals, and even the final appeal is kept dumped for
over an year. Bank does not provide any Investigation report, and for the statement of the culprits, bank insists its is a personal matter which cannot be disclosed. And what punishment is for such deals under which section of IPC ? How to proceed and get the culprit punished.

How to proceed and get the culprit punished.

Suraj Parkash
[email protected]
0315879780
SRINIVAS SHENOY
5 years ago
I feel the staff should all be set targets to assist the bank in recovering its overdues. The staff should be made to understand the importance of recovery for the institution which provides their bread and butter. They should also be taught various strategies to assist in these recovery efforts.
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