With the right ordinance in place, the RBI is progressing towards preparing the list of top loan defaulters. It may be recalled that the ordinance was created last month under the Banking Regulation Act, 1949. The ordinance gives RBI the power to resolve the troubling issue of non-performing assets (NPAs) or bad loans. The list of top defaulters will include cases where NPA (Non-Performing Assets) resolution is required under the insolvency act. With the ordinance in place, RBI can now ask banks to take action against loan defaulters to recover the pending dues. It is expected that the new ordinance will help resolve the NPA problem of banks.
Speaking about the development, Finance Minister Arun Jaitley said, “Under the new ordinance issued, the RBI is at a fairly advanced stage of preparing a list of those debtors where a resolution is required through the Insolvency and Bankruptcy Code (IBC) process. You will be shortly hearing about it … The RBI is actively working on that.”
Jaitley also talked about the recent farmer protests and the subsequent loan waiver schemes announced by different states. He said that the center will not take part in any of such loan waiver schemes and the funding for such schemes will have to come entirely from the finances available with respective states.