The Union Cabinet on Wednesday cleared an ordinance to empower the Reserve Bank of India (RBI) to reduce bad debts of public sector banks. The ordinance is aimed at amending the Banking Regulation Act to resolve the NPA crisis by giving powers to the central to auction off bad loans. Public sector banks were demanding a two-member oversight committees to monitor the bad loan resolution process so that their decisions are not called to question later. Of the Rs 5 lakh crore loans to the power sector, about Rs 1.6 lakh crore are stressed. Official figures suggest that bad loans rose by over Rs 1 lakh crore in the first nine months of last fiscal to Rs 6.07 lakh crore by December 31, 2016.

Source: dna May 04, 2017 00:45 UTC