RBI Current Affairs - 2019
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As per a written reply given by Union Finance Minister Smt. Nirmala Sitharaman in Lok Sabha, the number of wilful defaulters in nationalised banks has increased by more than 60% to 8,582 in five years to March 2019.
The Finance Minister provided the written reply in Lok Sabha to a question asked that whether the cases of willful defaulters of banks have increased during the past five years.
Wilful Defaulter is an entity or a person that has not paid the loan taken back to the bank despite having the ability to repay it. Wilful defaulters are acted against comprehensively.
Data Provided by Government:
By end of fiscal year 2014-15, the figure of wilful defaulters in nationalised banks stood at 5,349, and since then the number of such borrowers has been consistently rising- with being 6,575 (2015-16), 7,079 (2016-17), 7,535 (2017-18) and now increased to 8,582 in 2018-2019 fiscal.
During the last 5 financial years about ₹7,654 crore has been recovered from wilful defaulters’ accounts.
Steps Taken By Government
As per data reported by 17 nationalised banks in India, till 31 March 2019, suits for recovery have been filed in 8,121 cases out of 8,582.
SARFAESI Act: In cases involving secured assets, action under provisions of SARFAESI Act (Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002) has been initiated in 6,251 cases.
RBI Instructions: As per the instructions provided by Reserve Bank of India (RBI), wilful defaulters are not sanctioned any additional facilities by banks/financial institutions, their unit is debarred from floating new ventures for 5 year and even criminal proceedings are initiated wherever necessary. In accordance with this FIRs have been registered in 2,915 cases.
SEBI Regulations: Besides, vide Securities and Exchange Board of India (SEBI) regulations, wilful defaulters and companies who has with wilful defaulters as either promoters or directors have been debarred from accessing capital markets to raise funds.
IBC 2016: The Insolvency and Bankruptcy Code (IBC), 2016 has debarred wilful defaulters from participating in insolvency resolution process.
FEO Act 2018: The government has enacted Fugitive Economic Offenders Act, 2018 for effective action against wilful defaulters who flee Indian jurisdiction. It provides for attachment and confiscation of property of fugitive offenders and to disentitle them from defending any civil claim.
PSBs: Government has also advised all Public Sector Banks (PSB) to decide on publishing photographs of all concerned wilful defaulters and to obtain certified copy of passport of promoters/directors and other authorised signatories of companies availing loans of over ₹50 crore. The heads of PSBs have also been empowered to request for issuance of look out circulars (LoC) against wilful defaulters.
Tags: FEO Act 2018 • Fugitive Economic Offenders Act 2018 • Insolvency and Bankruptcy Code 2016 • Look out Circulars • Nirmala Sitharaman • Public sector banks • RBI • Reserve Bank of India • SEBI • Securities and Exchange Board of India • Union Finance Minister • Wilful Defaulters
The 20th Meeting of Financial Stability and Development Council (FSDC) was held under the Chairmanship of Smt. Nirmala Sitharaman, Union Minister of Finance and Corporate Affairs.
Key Highlights of Meeting
The Meeting reviewed current global and domestic economic situation, overall macro-economic situation and financial stability issues including those concerning Banking and Non Banking Financial Company (NBFC).
Council was also informed about progress made towards setting-up of Financial Data Management Centre (FDMC) under the aegis of FSDC, so as to facilitate integrated data aggregation and analysis as also a Computer Emergency Response Team (CERT-Fin) towards strengthening cyber security framework for financial sector.
Council also held consultations to obtain inputs and suggestions of Financial Regulators for Union Budget 2019-20. All the regulators presented their proposals for upcoming Budget. The financial sector regulators includes- SEBI (Capital Market), RBI (Monetary Sector), IRDA (Insurance), PFRDA (Pension) and IBC (Insolvency & Bankruptcy).
Council also took note of activities undertaken by FSDC Sub-Committee which is chaired by Reserve Bank of India (RBI) Governor and action taken by Members on decisions taken in earlier Meetings of FSDC.
What is Financial Stability and Development Council?
The FSDC was constituted in December 2010. It is apex body of sectoral regulators and not a statutory body.
Objective: to strengthen and institutionalise mechanism for maintaining financial stability, promoting financial sector development and enhancing inter-regulatory coordination.
Function: Among other things, it deals with issues relating to financial stability, financial literacy, financial inclusion, financial sector development, inter–regulatory coordination and macro prudential supervision of economy which also includes functioning of large financial conglomerates. No separate funds are allocated to Council for undertaking its activities.
FSDC Sub-Committee: It deliberates on agenda items proposed by any member of FSDC Council which mainly include matters relating to financial stability, inter-regulatory coordination, and financial sector development.
Tags: 20th Meeting of Financial Stability and Development Council • CERT-Fin • Computer Emergency Response Team • FSDC • FSDC Sub-Committee • inancial Stability and Development Council • IRDA • PFRDA • RBI • SEBI • Smt. Nirmala Sitharaman • Union Minister of Finance and Corporate Affairs