Union Finance Minister Arun Jaitley has introduced a bill to authorise the Reserve Bank of India (RBI) to direct banking companies to resolve the problem of stressed assets.
The bill was introduced in the Lok Sabha.
The unveiling of the Banking Regulation (Amendment) Bill, 2017, will amend the Banking Regulation Act, 1949 and replace the Banking Regulation (Amendment) Ordinance, 2017, which was introduced in May this year.
This measure will allow the central bank to initiate insolvency resolution process on specific stressed assets.
The regulator would also be authorised to initiate other directions for resolution, appoint or approve for appointment, authorities or committees to advise the banking companies for stressed asset resolution.
Acting on fast-track, the central bank in June had identified 12 large loan defaulters who are responsible for 25 per cent of the total bad loans in the banking sector.