It also underscored IBC’s status as the cornerstone of the bad loan resolution framework, scrapping all previous mechanisms. The circular had been one of the key measures the regulator took under the governorship of Das’ predecessor, Urjit Patel , who quit before his term was over amid a dispute with the government over various issues, including autonomy.The RBI notification, though, has been legally challenged, with several borrowers — especially the Association of Power Producers — terming it impractical and too harsh. They have sought more time to resolve unpaid loans.“RBI is fighting the NPA (non-performing assets) menace with credibility. It is assuring that the central bank is not thinking of dilution despite pressure. This circular is expected to drive better credit behaviour,” said MR Umarji, a legal expert on banking.

Source: Economic Times February 08, 2019 00:53 UTC