ZEE Business
ZEE BUSINESS
हिंदी में पढ़ें  हिंदी में पढ़ें
Live TV
Live TV
  • Home
  • Personal Finance
    • PPF
    • Mutual Funds
    • Income tax
    • EPFO
    • Income Tax Calculator
    • Personal Loan Calculator
    • Car Loan Calculator
    • Home Loan Calculator
    • SIP calculator
    • SWP Calculator
    • MF Returns Calculator
    • Lumpsum Calculator
  • India
    • Companies
    • Property
    • Startups
    • Uidai
  • Economy
    • Aviation
  • Tech
    • Mobiles
    • Apps
  • Auto
    • Cars
    • Bikes
  • Markets
    • Commodities
    • Currency
  • Railways
  • World
    • Economy
    • Politics
    • Markets
  • Survey
  • videos
  • photos
  • More ...
    • VIDEOS
    • PHOTOS
BREAKING NEWS
  • Stock Market Outlook: Our dependence on US market limited now, next 10-15 years belong to India, says Anil Singhvi | Here's why
  • Toyota Hyryder Unveiled: Toyota India unveils new self-charging hybrid electric SUV in India; check details
  • Virtual Digital Assets: VDAs to attract 1% TDS from today; know what CBDT says about new norms
  • Gold Price Today: Yellow metal surges by over Rs 1000 as excise duty hiked to 12.5% - check gold rate in your city
  • Monsoon session of Parliament to begin on July 18; to end on August 12
Read in App
Business News » India News

RBI circular a welcome step; provides more freedom to bankers: IBA

"Only thing is that now banks have more delegation (power) and there will be board level resolution policy and the discretion on whether you would like to take it (the case) to insolvency and bankruptcy proceedings or like to settle it outside that... (now) that decision is with the banks," he said.

  • Twitter
  • Facebook
  • Linkedin
  • whatapp
  • View in App
RBI circular a welcome step; provides more freedom to bankers: IBA
Reserve Bank's new circular for resolution of stressed assets, Photo: Reuters

The Reserve Bank's new circular for resolution of stressed assets is propelled by provisioning requirements and gives more freedom to bankers in taking decisions, Indian Banks' Association (IBA) Chairman Sunil Mehta said Saturday.

Two months after the Supreme Court struck down its February 12 circular, the Reserve Bank of India (RBI) Friday came out with a revised framework for resolving stressed assets wherein lenders have been given a 30-day period on whether to label an account as a non-performing asset.

"The RBI circular is a very welcome step. It has given more freedom to bankers to bring their own resolve and instead of directions, it (circular) has been propelled by provisioning requirements which will propel lenders to take timely decisions.

"... It has created a lot of clarity for various stakeholders," Mehta said on the sidelines of a seminar here.

Corporate Affairs Secretary Injeti Srinivas said in terms of the spirit and rigour, the latest circular is identical to the February 12 guidelines.

"Only thing is that now banks have more delegation (power) and there will be board level resolution policy and the discretion on whether you would like to take it (the case) to insolvency and bankruptcy proceedings or like to settle it outside that... (now) that decision is with the banks," he said.

He also noted that it is a very good replacement circular and given the Supreme Court's judgement that the RBI is not authorised to give a general circular, this is the best replacement circular we could have had.

The latest directions from the RBI retain the basic spirit of the February 12, 2018 circular as it mandates higher provisioning, bankruptcy options as well as do not allow any other resolution methods outside the new norms.

The new norms provide a framework for early recognition, reporting and time-bound resolution of stressed assets, the central bank said in a notification on Friday.

In April, the Supreme Court struck down the RBI's February 12 circular for resolving bad loans under which a company could be labelled as a non-performing asset if it missed repayment even by a day, and banks were to find a resolution within 180 days or else the case had to be sent to bankruptcy courts.

The RBI circular, issued on Friday, would be applicable to all borrowers with exposure of Rs 2,000 crore and above to banks, financial institutions like Nabard, Exim Bank, Sidbi, small finance banks and NBFCs, with immediate effect.

To a query on whether the number of cases referred under the Insolvency and Bankruptcy Code (IBC) might come down with the issuance of the RBI circular, Srinivas said the Code has always been the last resort and not the first.

"If you can have a resolution outside the IBC framework, you should try that first... Empirical evidence show even today, 6,500 cases got resolved before admission. That means some sort of informal mediation has taken place and they have got resolved," he said.

According to him, even now people prefer to resolve it outside the IBC and only in cases where there is no other option but court-supervised process, then it would come to the IBC and that is a good development.

"Now, it is left to the banks. You will have an inter-creditor agreement and if 75 per cent of banks in terms of voting share or 60 per cent of banks in terms of numbers, they come to some sort of consensus then you can push through the resolution plan... It is a very good solution and we could not have asked for anything better," he noted.

Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.

TAGS:
Reserve Bank of IndiaEconomy
Written By: PTI
Updated: Sat, Jun 08, 2019
04:17 pm
New Delhi, PTI
RELATED NEWS
Fintech's halt PPI loan, buy now pay later services as RBI restrictions posing challenges Fintech's halt PPI loan, buy now pay later services as RBI restrictions posing challenges
RBI extends implementation of card tokenisation norms by 3 months; deadline extended till 30 September RBI extends implementation of card tokenisation norms by 3 months; deadline extended till 30 September
RBI stops non-bank PPI issuers from loading wallets, cards via credit lines RBI stops non-bank PPI issuers from loading wallets, cards via credit lines
First tranche of 2022-23 gold bonds to open for subscription on Jun 20 First tranche of 2022-23 gold bonds to open for subscription on Jun 20
Banks, financial institutions should proactively undertake stress testing of loan books: RBI DG Rao Banks, financial institutions should proactively undertake stress testing of loan books: RBI DG Rao

LATEST NEWS

Closing Bell: Nifty, Sensex pare losses to end flat; oil & gas biggest loser, FMCG top gainer

Oil India Limited completes beta demo of hydrogen powered bus developed under its Startup programme SNEH

Petroleum products exporters ONGC, RIL, MRPL, Vedanta shares fall after government imposes cess on diesel, petrol; know what is triggering correction

HSBC to relaunch India private banking business within a year, says India CEO

Excise duty on petrol, diesel, ATF hiked up to Rs 12; details

Toyota Hyryder Unveiled: Toyota India unveils new self-charging hybrid electric SUV in India; check details

Gold declines Rs 323; silver tumbles Rs 776

Toyota Hyryder unveiling event starts: Check live streaming link here

OnePlus Nord 2T 5G price in India starts at Rs 28,999 - Check offers, availability and specifications

Gold jumps Rs 1,088 amid import duty hike

  • India News
  • World News
  • Companies News
  • Market News
  • Personal Finance News
  • Technology News
  • Automobile News
  • Small Business News
  • Income Tax Calculator
  • Live TV
  • Videos
  • Photos
  • Author
  • Rss Feed
  • Advertise with us
  • Privacy Policy
  • Legal Disclaimer

Latest Trending Updates

  • EPFO
  • Budget 2020
  • Income Tax Return
  • Auto Expo 2020
  • Home Loan
  • Business News

Trending Topics

  • Income Tax
  • income Tax Calculator
  • 7th Pay Commission
  • Reserve Bank of India
  • GST
  • Latest Business News

Follow us on

zeebiz
zeebiz

Partner Sites

  • Zee News
  • Hindi News
  • Marathi News
  • Bengali News
  • Tamil News
  • Malayalam News
  • Gujarati News
  • Telugu News
  • Kannada News
  • DNA
  • WION
© 2022. India Dot Com Private Limited. All Rights Reserved.
LIVE TV