We are also looking at additional legislation for resolution of bankruptcy in financial firms,” he said. So this is more in terms of the structural reforms we are doing which is to look at the resolution and insolvency process.”The new law will deal with financial institutions including banks, NBFCs, and other financial institutions that have money deposited, he said. The inability to shut loss-making firms and collect dues had locked up funds at banks and damped lending and investment. Photo: Ramesh Pathania/MintNew Delhi: Having overhauled the century-old bankruptcy laws for companies, the government will now bring a new insolvency law for banks and financial institutions to vest with depositors the first right over assets of a defunct entity. So we have to come up with appropriate resolution processes for orderly winding down of financial firms.

Source: Mint June 12, 2016 09:11 UTC