RBI to expand scope & reconstitute Oversight Committee
Published: May 23, 2017
By TIOLCORP News Service
MUMBAI, MAY 23, 2017: In a Release issued yesterday, the Reserve Bank of India (RBI) outlined the steps taken and those on the anvil, post the promulgation of the Banking Regulation (Amendment) Ordinance, 2017. The amendments to the BR Act 1949, introduced through the Ordinance, and the notification issued thereafter by the Central Government empower RBI to issue directions to any banking company to initiate insolvency resolution process in respect of a default, under the provisions of the Insolvency and Bankruptcy Code, 2016 (IBC). It also enables RBI to issue directions with respect to stressed assets and specify one or more authorities or committees to advise banking companies on resolution of stressed assets.
The Oversight Committee (OC), constituted by the IBA in consultation with RBI, presently consists of two members. It has been decided to reconstitute the OC under the aegis of the RBI and also enlarge it to include more Members so that the OC can constitute requisite benches to deal with the volume of cases referred to it. While the current Members will continue in the reconstituted OC, names of a few more will be announced soon. The RBI is planning to expand the scope of cases to be referred to the OC beyond those under S4A as required currently.
The Reserve Bank is working on a framework to facilitate an objective and consistent decision making process with regard to cases that may be determined for reference for resolution under the IBC. RBI has already sought information on the current status of the large stressed assets from the banks. The RBI would also be constituting a Committee comprised majorly of its independent Board Members to advise it in this matter. The current guidelines on restructuring are under examination for such modifications as may be necessary to resolve the large stressed assets in the banking system in a value optimizing manner.
