Banking sector this week: RBI refers 12 defaulters to IBC; govt makes Aadhaar mandatory for bank A/cs – Money Perception

The banking sector finally got more power to come to a definite resolution through the legal route against loan defaulters.

The highlight this week was the identification of 12 loan accounts by the Reserve Bank of India to be immediately referred to the Insolvency and Bankruptcy Code or IBC, an Act that helps troubled corporates, partnership firms and individuals in debt to re-organise and opt for insolvency resolution in a time-bound manner.

Here is an explainer of what Insolvency and Bankruptcy Code means, how it will help and what the process is.

Bankers have been given 15 days to file the first 6 accounts at the National Company Law Tribunal (NCLT) under the IBC.

However, even as bankers expect RBI and government initiation to push resolution, they expect legal and technical delays given there is no precedence of such resolution before.

Bankers are also seeking relaxation in the provisioning requirement towards these accounts for which RBI will soon release guidelines

Aadhaar mandatory

Another key development was making of unique identity card Aadhaar mandatory for opening of bank accounts as well as for any financial transaction of Rs 50,000 and above.

This is a 3-step guide to linking your Aadhaar and PAN card

Also, two state governments announcing farm loan waivers has led experts to suggest farmers need safety on their produce and cushion on the rising input costs rather than feed loan waivers as a temporary but unfruitful measure.