Government Open to Giving More Powers to RBI In Insolvency Cases

The government is open to providing more powers to the Reserve Bank of India (RBI) to direct lenders to take action on stressed assets, a senior finance ministry official told ET. There is a growing view in the government that there has to be some regulatory supervision over debt resolution by the RBI, The Economic Times reported. “It cannot be left to the discretion of banks — there has to be some regulatory supervision, and that should be from the banking sector regulator,” said the official. The Supreme Court had, earlier this year, struck down the RBI’s circular of February 12, 2018, on the resolution of stressed assets as ultra vires, or beyond the scope of its legal authority. But banks on their own can proceed with the resolution of stressed assets. Read more