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ARTICLE · 14 JUNE 2017

Stressed Assets - Rbi Granted Sweeping Powers

Nishith Desai Associates
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Ordinance amends the Banking Regulation Act, 1949 empowers RBI to direct banks to resolve specific stressed assets and initiate Insolvency Resolution Process...

IndiaInsolvency/Bankruptcy/Re-Structuring
Swati Sharma
Swati Sharma
Atikant Kaur Sahni
Atikant Kaur Sahni
M.S. Ananth
M.S. Ananth
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  • Ordinance amends the Banking Regulation Act, 1949 empowers RBI to direct banks to resolve specific stressed assets and initiate Insolvency Resolution Process, as per the Insolvency and Bankruptcy Code, 2016.
  • RBI amends Joint Lender Forum (as defined below) norms to accelerate the Corrective Action Plan for stressed loans.

As of December 2016, gross Non-Performing Assets ("NPA") for public and private sector banks stood at a staggering figure of USD 10 billion (approximately). India has had a long-suffering history with bad loans which have handicapped the lending power banks and financial institutions and has adversely affected Ease of Doing Business in India.1

In keeping with its aim to streamline the process of resolving stressed assets and with a larger endeavour to ensure ease of doing business in India, legislators and regulators have introduced changes to the Joint Lender Forum ("JLF") norms and the Banking Regulation Act, 1949 ("Banking Regulation

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