Mumbai: Governor Shaktikanta Das Thursday said the Reserve Bank will shortly come out with a revised circular for bad loan resolution, after its February 12, 2018 circular was quashed by the Supreme Court.
The Supreme Court had Tuesday declared the one-year-old circular as "ultra vires", in response to a petition by stressed borrowers.
Speaking to reporters at the customary press conference after the announcement of the policy review, Das said the RBI will issue the revised circular for resolution of stressed assets without "undue delay".
He said powers of the central bank under section 35AA of the Banking Regulation Act are not in doubt at all, and the apex court has said they have to be exercised in a
"particular manner". "We have to comply with the Supreme Court order and act accordingly," he said, asserting that the central bank stands committed to resolve stressed assets in a timely manner.
The Supreme Court on Tuesday quashed the stringent RBI circular which mandated banks to recognise even one-day defaults and finding a resolution within 180 days failing which the account in question has to be sent to bankruptcy courts if it is Rs 2,000 crore and above.
A two-judges bench comprising Rohinton Nariman and Vineet Saran came on a petition filed by 34 power companies which alone owe Rs 2.2 lakh crore to banks. Legal and industry experts have voiced concern over the order, stating that there was a marked change in borrowers behaviour after the circular was issued which would now change for the worse.
At the first bi-monthly policy review for fiscal 2020, the monetary policy committee voted for a 0.25 per cent rate cut, its second such action in consecutive policies
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