Empowering RBI to act against NPAs decisive: SBI chairman

New Delhi [India], May 5 : State Bank of India Chairman Arundhati Bhattacharya on Friday said the country and its banking system need to move quickly and decisively to take benefits from enabling provisions.

"Amendments to the Banking Regulations Act, coming on the heels of the enactment of the Insolvency and Bankruptcy Code and amendments to the SARFAESI and Debt Recovery Tribunal Acts indicate the government's firm commitment to find a satisfactory solution to the NPA resolution problem.

Empowering the RBI with an explicit mandate should reorient various stakeholders for effective NPA resolution.

The country and its banking system need to move quickly and decisively to take benefits of these enabling provisions," Bhattacharya said.

Earlier in the day, President Pranab Mukherjee approved a government ordinance to empower the Reserve Bank of India (RBI) to act against on non-performing assets (NPA).

Finance Minister Arun Jaitley said it was necessary to empower the RBI in relation to specific stressed assets, since it was doubtful that whether the language of Section 35 A of the Banking Regulation Act covered the respective empowerments.

"It was necessary to empower RBI in this direction. The ordinance passed by the Honorable President seeks to incorporate issuances of Government of India authorizing the RBI to initiate the insolvency and bankruptcy proceedings in relation to any stressed assets," Jaitley told media here.

The ordinance will give greater powers to the Reserve Bank of India (RBI) to tackle mounting bad loans, according to an official in the finance ministry aware of the development.

Earlier, the Cabinet had approved promulgation of an ordinance to amend the Banking Regulation Act for resolution of the non-performing asset (NPA) crisis.

The Cabinet also gave its nod to the National Steel Policy - 2017 which targets to achieve 300 Million tonne of steel making capacity by 2030 with an additional investment of ten lakh crore rupees.

Source: ANI