‘Draft Bill on financial firms’ resolution to face obstacles’

The draft Bill on resolution of financial firms, which includes an option to bail-in senior creditors, is likely to face political obstacles and will require strong consensus for implementation, Fitch Ratings said on Monday. After enacting a bankruptcy code for time-bound settlement of insolvency cases in non-financial firms, the finance ministry, last month, released a draft Bill to set up a resolution corporation to address similar issues among financial firms. India currently lacks a comprehensive policy framework to deal with the failure of financial institutions. Resolution powers for the financial sector are limited and scattered across several regulatory bodies, Fitch said.