RBI gets powers to solve NPA mess in banks

NewDelhi MAY 6: We know that there are rising non-performing assets (NPA) in the banking sectors.

India is facing a unique problem of Twin Balance Sheet problem.

Under this problem, the Balance sheet of the Corporate companies are in losses and this, in turn, affects the balance sheet of banks because companies cannot pay loans taken from banks because of the losses of the companies.

In order to solve the above problem, the Central Government on Thursday has brought an ordinance to amend the Banking Regulation Act.

The details of the ordinance are as follows



*RBI will now have special powers to instruct banks to resolve stressed assets by the new Insolvency process which was framed in 2016.

*RBI will intervene in the resolution of some of NPA and will make sure that banks take faster decisions.

*Banks will now be protected from the vigilance of CBI CAG, for taking decisions relating to a haircut for the resolution of stressed assets.

Although the steps taken are not enough to solve the gigantic NPA mess.Something is better than nothing.