RBI in advanced stage to help resolve bad loans: FM
Central bank collecting additional info to create a roadmap
Finance minister Arun Jaitley on Monday said that the Reserve Bank is at an advanced stage of preparing a list of bad loans where resolution is required under insolvency and bankruptcy rules.
“Under the new ordinance issued, the RBI is at a fairly advanced stage of preparing a list of those debtors where a resolution is required through the Insolvency and Bankruptcy Code process. You will be shortly hearing about it... RBI is actively working on that,” Mr Jaitley said.
Centre had last month promulgated the ordinance amending the Banking Regulation Act, 1949, to empower RBI to resolve the thorny issue of nonperforming assets (NPAs). As per the ordinance RBI was empowered to ask banks to initiate insolvency proceedings to recover bad loans and promised more measures to resolve the NPA problem.
RBI deputy governor S.S. Mundra pointed out that ordinance on NPAs essentially involves 2-3 components. “One of the important components was to enhance the size and scope of oversight committee. Also, the identification of the accounts which can be actively taken up under the process. So, on the second point, an internal advisory committee is constituted by the RBI,” he said.
Mr Mundra informed that information has been collected from banks on certain large accounts, for which some additional details are being sought.