Today Finance Minister Arun Jaitley introduced a bill under which new rules will be passed allowing the Reserve Bank of India to directly initiate the reclamation proceedings against loan defaulters. This Banking Regulation (Amendment) Bill will replace an ordinance that earlier enabled this. The recovery procedure would be under the pending and bankruptcy Code,2016 providing time-bound to resolve defaults. Saugata Roy member of Trinamool Congress opposed the introduction of the Bill. In his statement he said “It is a desperate step by a desperate government,” Roy said.
“The same RBI is being authorised to regulate banks which has till date not been able to give (the total) amount of money deposited in banks after demonetisation,” Roy said. He demanded the bill to be sent to a parliamentary committee. Jaitley responded saying that the objections raised by Roy had nothing to do with the introduction of the bill. “The issues raised by him can be discussed when the bill comes up for discussion,” the Minister said, after which it was introduced in the House.
The RBI have already identified 12 large loan defaulters by June, who account for 25 per cent of the total bad loans in the banking sector. The action under the liquidation and Bankruptcy Code has already begun in certain cases, including Essar Steel, Bhushan Steel and Bhushan Power & Steel. Over Rs. 9 lakh crore assets of banks have risen and now RBI is being given power to refer the cases to Insolvency and Bankruptcy Board. The RBI would also be given power to issue other directions for resolution or approve for appointment, authorities to advise the banking companies for stressed asset solution.