RBI in driver's seat

Bad loan steps are welcome, more waiting to be done

The new regulation on the bad loan problem of India’s banking sector may prove to be just what the doctor ordered under the given circumstances. The Ordinance amending the Banking Regulation Act gives powers to the Reserve Bank of India (RBI) to direct banks to initiate bankruptcy proceedings against defaulting companies, and to take decisions on behalf of lenders while dealing with stressed assets. It also gives the government the powers to authorise the central bank to invoke the insolvency code against defaulters. Apart from dealing with bad assets, the banking regulator will also set up oversight committees to direct