Committee calls for amendments to rules and regulations

A Parliamentary panel has asked the government to take urgent remedial measures to reduce volume of stressed assets among banks and strengthen vigilance mechanism, especially expressing its concern about rising non-performing assets (NPAs).

The Committee on Petition has stressed to the government to impress upon the Reserve Bank of India (RBI) to monitor and follow up strict compliance of the relevant instructions with the banks and financial institutions on a regular basis.

It pointed out that mere issuing of guidelines or advisories by the government or the RBI for averting the NPA fraud incidences do not seem to have yielded the desired results.

The RBI, as a Regulator, seems to have not succeeded in implementing and enforcing its own guidelines, said the committee in a report.

It also recommended that the existing vigilance mechanism should be re-visited and, if required, it be made more effective through amendment.

The panel called for a more robust vigilance mechanism to put a check on the incidences of irregularities, malpractices, corruption, etc, at all levels in the functioning of banks.

The committee said the banking laws, including the State Bank of India Act, be amended, making it compulsory to disclose of names of loan defaulters.

But it accepted the Ministry of Finance/RBI opinion that the disclosure of information of other defaulting borrowers may not be in the interest of the revival of their distressed business units, which may be otherwise viable.

Yet the panel reiterated that they should undertake an “objective examination and analysis” of the provision/s for disclosure of details of loan defaulters through amendment of existing Acts/Rules while guarding the interest of the revival of distressed business. fii-news.com