Mumbai: The Supreme Court on Tuesday quashed the Reserve Bank of India’s (RBI) 12 February circular which prescribed rules for recognising one-day defaults by large corporates and called for insolvency action as a remedy. "We have declared the RBI circular ultra vires," Bloomberg quoted Justice Rohinton F. Nariman as announcing the judgment. Since the central bank had also cancelled all its previous restructuring schemes in favour of 12 February circular, lenders will now have to individually look at resolution plans. In its 12 February circular, the central bank had asked lenders to institute a board-approved policy for resolution of stressed assets. The apex court directed that all pleas filed by the central bank related to the February circular should be transferred to it.

Source: Mint April 02, 2019 05:35 UTC