India tweaked its laws on Friday to help tackle a record $150-billion in troubled-banks debt, giving its central bank greater power to identify and enforce resolution on specific soured loans. In an executive order that alters the Banking Regulation Act, the government authorised the Reserve Bank of India (RBI) to direct banks to initiate an insolvency-resolution process in the case of a default under provisions of the bankruptcy code. The ordinance, which takes effect immediately, also says the central bank may specify one or more authorities or panels to advise banks on resolution of stressed assets. "The object of this act is that the present status quo can't continue and the present status quo is that not much was moving," Finance Minister Arun Jaitley told reporters. The move is the latest attempt to tackle the record 9.64-trillion rupees (R2.02-trillion) in stressed loans accumulated by end-December that have choked new credit and hit economic growth. "The ordinance is a welco...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.