SC to hear petition by power firms on RBI’S insolvency mandate on Nov 28
does not bode well in the short term for confidence and the Indian rupee.” Finance ministry spokesman DS Malik didn’t reply to two calls made to his mobile phone, while the central bank spokesman was not immediately available for a comment.
The recommendations being considered include setting up several committees comprising two to three board members each. The body has the powers to frame rules under section 58 of the Reserve Bank of India Act, 1934, and no legislative change is required, the people said.
RBI’S board regularly advises and guides the regulator, leaving decision making to the governor and his colleagues.
However lately, Swaminathan Gurumurthy, a chartered accountant who was nominated by the Modi administration to the board, and government nominees Subhash Chandra Garg and Rajiv Kumar have been vocal about perceived shortcomings in banking supervision, flow of credit to industry and easier financial conditions to overcome a crisis in its shadow-banking sector. That prompted central bank deputy governor Viral Acharya to warn in a speech last month that a move to undermine the RBI’S independence will attract the wrath of the markets. NEW DELHI: The Supreme Court will on November 28 hear a challenge by power generation companies to the Reserve Bank of India’s (RBI) circular laying down the norms for resolving bad loans.
The matter was mentioned on Friday by former attorney general Mukul Rohtagi appearing for these firms before a bench headed by justice Rohinton F. Nariman.
The Allahabad high court had on August 27 denied interim relief to power firms, which had challenged RBI’S February 12 circular on bad loans. RBI, in its circular, tightened the norms for settling bad loans by allowing lenders to initiate insolvency proceedings against defaulters and also set timelines for resolving such loans. Banks were given several options to arrive at a resolution plan but had to do so in 180 days. .