10 May 2017
INDIA: Central Bank Given New Powers in Crackdown on Loan Defaulters
The country’s central bank, the Reserve Bank of India (RBI, has now been granted the right to instruct other banks and financial institutions to begin insolvency resolution proceedings against parties that have defaulted on loans. In certain situation, the RBI is also entitled to initiate its own actions against bad debtors.
The move comes as part of the government’s bid crack down on loan defaulters, with the financial sector currently having to contend with some US$124.26 billion worth of arrears. Introduced as an amendment to the 1949 Banking Regulation Act, the measure comes in the wake of the country’s recently-adopted Insolvency and Bankruptcy Code.
For further details, see Insolvency Debt Recovery Period in India Slashed from Four Years to 180 Days.