President Pranab Mukherjee today consented to an ordinance empowering RBI for effective resolution of NPAs. The ordinance authorises the central bank to direct banks to start insolvency procedures in case of a loan default. The ordinance that will amend the Banking Regulation Act gives RBI more teeth to act against loan defaulters. Highlighting the necessity to deal with mounting stressed assets in India’s banking system the ordinance said, “...The stressed assets in the banking system have reached unacceptably high levels and urgent measures are required for their resolution”. Of the total stressed assets in the banking system, public sector banks are saddled with non-performing assets of Rs 6 lakh crore.

Source: Hindustan Times May 05, 2017 08:15 UTC