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Bankruptcy Bill gets Cabinet nod

The Bill, when enacted, will pave the way for setting up of the Resolution Corporation

Press Trust of India  |  New Delhi 

Cabinet clears new Bill to deal with bankruptcy in financial sector

The Union on Wednesday cleared a proposal to introduce a Bill in for setting up the to deal with in banks, and The Financial Resolution and Deposit Insurance Bill, 2017, which aims to instil discipline in financial service providers in the event of a financial crisis by limiting the use of public money to bail out distressed entities, was approved by the Union chaired by Prime Minister on Wednesday, an official statement said. The proposed Bill will provide for a comprehensive resolution framework to handle any situation in banks, insurers and entities. According to the statement, the Bill when enacted will pave the way for setting up of the It would also lead to repeal or amendment of resolution-related provisions in sectoral Acts as listed in Schedules of the Bill. "It will also result in the repealing of the Deposit Insurance and Credit Guarantee Corporation Act, 1961, to transfer the deposit insurance powers and responsibilities to the Resolution Corporation," it said. The would ensure the stability and resilience of the financial system, protecting the consumers of covered obligations up to a reasonable limit and public funds to the extent possible. The government has recently enacted the Insolvency and Code, 2016, for the insolvency resolution of non- The proposed Bill complements the Code by providing a resolution framework for the Once implemented, this Bill together with the Code will provide a comprehensive resolution framework for the economy. It seeks to give comfort to consumers of financial service providers during any It would help in maintaining financial stability in the economy by ensuring adequate preventive measures while at the same time providing necessary instruments for dealing with a post-crisis situation. The Bill aims to strengthen and streamline the current framework of deposit insurance for the benefit of a number of retail depositors.

Further, this Bill seeks to cut down the time and costs involved in resolving the problem of the distressed entities. Other decisions Interest Subvention Scheme for 2017-18 * Farmers will continue to get short-term loan of up to Rs 3 lakh at a subsidised interest rate of 7%, and prompt repayers will get it at 4% Ex-post facto nod to India-Palestine agri pact * The MoU provides for cooperation in agricultural research, veterinary field, including capacity enhancement of Palestinian veterinary services and animal health, irrigation and climate change

First Published: Thu, June 15 2017. 01:06 IST