Current Affairs PDF

FM Arun Jaitley introduces bill to amend Banking Regulation Act

AffairsCloud YouTube Channel - Click Here

AffairsCloud APP Click Here

On July 24, 2017, The Banking Regulation (Amendment) Bill, 2017, was introduced in Lok Sabha by Finance Minister Arun Jaitley. The bill seeks to amend the Banking Regulation Act, 1949 and replace the Banking Regulation (Amendment) Ordinance, 2017, which was promulgated in May 2017.

Key Provisions of Banking Regulation (Amendment) Bill, 2017:

  1. This bill, popularly known as bad debt resolution or Non-performing assets (NPA) ordinance authorises Reserve Bank of India (RBI) to initiate insolvency resolution process on specific stressed assets.
  2. The bill also has a provision, which empowers RBI to issue other directions for resolution, appoint or approve for appointment, authorities or committees to advise the banking companies for stressed asset resolution.

Opposition to Banking Regulation (Amendment) Bill, 2017:

Jaitley introduced the Bill amid protests in the House by opposition members over the alleged incidents of lynching by cow vigilantes in different parts of the country.

  • Just before the bill was introduced, Trinamool Congress member Sougata Ray said he was opposed to the banking regulation ordinance arguing that giving such powers to RBI will detract it from macro-economic to micro-economic issues and render the bank FM Arun Jaitley introduces bill to introduce bill to amend Banking Regulation Actmanagement useless.
  • Ray demanded that the bill be referred to the Parliamentary Standing Committee.
  • In context of these remarks, Mr. Jaitley said that it will be dealt with when the bill comes up for a discussion.

Rising NPA and RBI’s action:

  • It is to be noted that Non-performing assets of banks in India have risen to over Rs 9 lakh crore. 
  • Moving on fast-track, the RBI had in June 2017 identified 12 large loan defaulters who account for 25 per cent of the total bad loans in the banking sector.
  • Action under the Insolvency and Bankruptcy Code has already begun in certain cases, including Essar Steel, Bhushan Steel and Bhushan Power & Steel.