MUMBAI (Reuters) - India’s central bank said on Thursday it would issue a revised circular on the resolution of stressed assets after the Supreme Court this week struck down its earlier directive that imposed tougher norms on banks dealing with non-performing loans.
The Supreme Court had said on Tuesday that the Reserve Bank of India (RBI) had acted beyond its authority when it asked banks to drag a defaulter to an insolvency process if they are not able to find a resolution to a company’s debt within six months.
“The RBI’s powers are not under doubt,” Governor Shaktikanta Das said in Mumbai, while speaking to the press after announcing a cut in the RBI’s benchmark interest rate.
The “RBI will take necessary steps including issuance of a revised circular as may be necessary for expeditious and effective resolution of stressed assets,” he said, adding the RBI stands committed to maintaining and enhancing the momentum on the resolution of stressed assets and an adherence to credit discipline.
Reporting by Promit Mukherjee; Editing by Euan Rocha