President Pranab Mukherjee on Friday approved an ordinance with amendments to the Banking Regulation Act, 1949, allowing the Reserve Bank of India to take timely action against loan defaulters.
“The Central government may by order authorise the Reserve Bank to issue directions to any banking company or banking companies to initiate insolvency resolution process in respect of a default, under the provisions of the Insolvency and Bankruptcy Code, 2016,” the ordinance said.
The central bank may, from time to time, issue directions to banking companies for the resolution of stressed assets.
“The Reserve Bank may specify one or more authorities or committees with such members as the Reserve Bank may appoint or approve for appointment to advise banking companies on resolution of stressed assets,” the ordinance said.
