Union Finance Minister Arun Jaitley introduced the Banking Regulation (Amendment) Bill, 2017, in the Lok Sabha on Monday. The Bill seeks to authorise the RBI to resolve the problem of stressed assets, even as the Opposition demanded that it be sent to a standing committee for scrutiny.
The Bill seeks to amend the Banking Regulation Act, 1949, and replace the Banking Regulation (Amendment) Ordinance promulgated in May. It allows the RBI to open an insolvency resolution process in respect of specific stressed assets. The RBI will also be empowered to issue directives for resolution and appoint authorities or committees to advise the banking companies on stressed asset resolution.
Desperate step
Before that, Trinamool Congress member Saugata Roy said he opposed the ordinance itself and called it a “desperate step by a desperate government”. Non-performing assets of banks have risen to over ₹9 lakh crore, and now the RBI was empowered to refer the cases to the Insolvency and Bankruptcy Board, he said.
“It is the same RBI which had not been able to count notes [after demonetisation]. Giving such powers to the RBI will switch its attention from macro-economic issues to micro-economic issues and render the bank management useless,” Mr. Roy said. He wanted the Bill referred to a standing committee.
Speaker Sumitra Mahajan asked Mr. Jaitley if he wanted to respond to Mr. Roy’s remarks. The Finance Minister said the issues would be dealt with when the Bill came up for a discussion.