Lok Sabha on Thursday passed Banking Regulation (Amendment) Bill, 2017 which will allow the government to empower Reserve Bank of India to resolve the problem of stressed assets.
The ordinance was promulgated in May as the immediate action was required to combat the unacceptably high levels of stress in the banking system.
The RBI has also been empowered to issue other directions for resolution, and appoint or approve appointment, authorities or committees to advise banking companies for resolution of stressed assets.
Replying to the discussion on the bill in the Lok Sabha, Finance Minister Arun Jaitley said, “In the first round, the RBI had referred 12 cases to banks to be taken up for insolvency proceedings”.
He said, if the banking system is robust then it will have the capacity of lending money for the need of business and industry.
“No one can claim the right of equality in not paying banks back”.
Mr Jaitley said, for power sector, the government is implementing UDAY Scheme for State power distribution companies.
Banking Regulation Ordinance came in very handy in the High Court which ruled in favour of the banks and RBI when Essar Steel charged RBI of singling out some borrowers and taking them to the Bankruptcy Court.
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.
Jaitley, however, said that to protect the interests of senior citizens, the government has already floated a deposit scheme that guarantees 8-plus % interest rate.