The stressed
loans resolution push which the government has undertaken through the Banking
Regulation (Amendment) Ordinance 2017 will empower the Reserve Bank of India.
Outlook Of Nifty/bank nifty today
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Nifty Outlook:
The
stressed loans resolution push which the government has undertaken through
the Banking Regulation (Amendment) Ordinance 2017 will empower the Reserve
Bank of India (RBI) to directly intervene in settling bad loan cases. While
the RBI already has adequate general power under Section 35A to give
directions to banks, the amendment to the Banking Regulation Act is being
done to complement changes in the regulatory system following the
introduction of the Insolvency and Bankruptcy Code (IBC). In the Banking
Regulation Act 1949, two more Sections got added – Section 35AA and section
35AB.
Bank Nifty Outlook:
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 gazette notification said. Jaitley further said
that the banks necessarily need to be in a robust position to support
growth. "And if the banks have an unacceptably high level of NPAs
(non-performing asset), this hinders their capacity," he said, explaining
that in order to further empower the apex bank, the Cabinet on Wednesday
decided to recommend to the President, the issuance of an ordinance.
Technical Outlook
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