Parliament has passed the Banking Regulation (Amendment) Bill, 2017 with the Rajya Sabha approving it on Thursday, the Lok Sabha has already passed it.
Replying to a debate on the Bill, Finance Minister Arun Jaitley said, the wilful defaulters will not be spared and prosecution s are being launched against them. He said, the government’s decision has shaken the defaulters and they have started rushing to banks to resolve the issue.
He said, the Non-Performing Assets, NPAs in the banks stand at 6.41 lakh crore in the public sector banks while total stressed assets are at 8.02 lakh crore. He said, every account figuring in HSBC, Liechtenstein and Panama is being investigated and the Government in touch with concerned countries in this regard. The Minister also said that infrastructures in Debt Recovery Tribunal, National Company Law Tribunal is being expanded to deal with stressed assets.
Participating in the debate, Jairam Ramesh of Congress demanded that NPA defaulters should be punished. He charged the Government with shying away from responsibility. Sukhendu Sekhar Roy of Trinamool Congress alleged that the bill would not serve it’s intended purpose.
As per information received, the bill seeks to amend the Banking Regulation Act, 1949 to insert provisions for handling cases related to stressed assets of banks. Stressed assets are loans where the borrower has defaulted in repayment or where the loan has been restructured.
The bill will replace the Banking Regulation (Amendment) Ordinance, 2017 which was promulgated on 4th of May this year. The legislation will enable the Central government to authorize the Reserve Bank of India (RBI) to direct banking companies to resolve specific stressed assets by initiating insolvency resolution process.
The RBI has also been empowered to issue other directions for resolution, and appoint or approve appointment, authorities or committees to advise banking companies for resolution of stressed assets.