Court directs RBI on ultra vires!
RBI places Prudential Framework For Resolution of Stressed Assets! RBI to direct banks for initiation of insolvency! Hon’ble Supreme Court, vide its order dated April 2, 2019, had held the RBI circular dated February 12, 2018 on Resolution of Stressed Assets as ultra vires. In light of the same, the Statement on Framework for Resolution of Stressed Assets issued by the Governor on April 4, 2019 had clarified that the Reserve Bank of India will take necessary steps, including issuance of a revised circular, as may be necessary, for expeditious and effective resolution of stressed assets. Accordingly, the Reserve Bank has today placed on its website the prudential framework for resolution of stressed assets by banks in the wake of the judgement of the Hon’ble Supreme Court of India. The fundamental principles underlying the regulatory approach for resolution of stressed assets are as under: 1: Early recognition and reporting of default in respect of large borrowe...