Resolution corporation for financial firms in the works

A JPC is examining Financial Resolution and Deposit Insurance Bill

The proposal in the Financial Resolution and Deposit Insurance Bill, 2017, to introduce a resolution corporation to tackle bankruptcy in financial services firms has piqued the interest of analysts.

The working of the resolution corporation will be much like what has been laid out in the Insolvency and Bankruptcy Code (IBC), which has been devised for corporate entities.

Financial firms do not fall in the ambit of the IBC and, therefore, bankruptcy needs of financial firms, such as banks, have to be coordinated outside the IBC process. 

The resolution corporation would be the equivalent of the IBC in that case.