The government and the Reserve Bank of India will have to structure a new set of regulations to make sure that borrowers return their lending on time as Supreme court turned down an earlier rule of the monetary authority, NITI Aayog chief executive Amitabh Kant said.
With the Supreme Court turning down (the Feb. 12, 2018 RBI circular on NPAs) as ultra vires, the issue needs to be relooked by both the RBI and government to arrive at a new regulation that will ensure that financial discipline from borrowers should continue, he told.
The ruling by a division bench of Justices Rohinton Nariman and Vineet Saran has put a big question mark on the resolution of 70 large accounts which together owe the system over Rs 3.8 lakh crore. The ruling came on a petition filed by 34 power companies which alone owe Rs 2.3 lakh crore to banks.
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