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Stressed assets circular to be revised
More in the news
- The Supreme Court few days back struck down the Reserve Bank of India’s ‘February 12 2018 order’ that dealt with resolution of stressed assets in the economy.
- The top court had termed the February 12, 2018 order as unconstitutional.
- However, according to the RBI governor, the validity of section 35AA of the Banking Regulation Act remains intact.
- Section 35AA allows the RBI to issue directions on initiation of insolvency in case of a default.
- Section 35AA and Section 35AB of the Banking & Regulation Act were introduced in May 2017 to add more teeth to the RBI's fight to tackle the issue of bad loans in the system.
- Section 35AB deals with RBI's powers with respect to the issue of resolution of stressed assets.
- About circular :
Source
The Hindu, ET.