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The Banking Regulation (Amendment) Bill 2017 was passed by the lower house of the parliament on Thursday. It will replace the Non-Performing Assets Ordinance, which came into effect earlier this year.

The Banking Regulation (Amendment) Bill 2017 was passed by the lower house of the parliament on 27 July 2017. It will replace the Non-Performing Assets Ordinance, which came into effect earlier this year.

Finance Minister Arun Jaitley, on 31st July 2017 (Monday), had introduced a bill in Lok Sabha to amend the Banking Regulation Act 1949. The measure allows the RBI to initiate insolvency resolution process on specific stressed-assets.

The RBI would also be empowered to issue other directions for resolution, appoint or approve for appointment, authorities or committees to advise the banking companies for stressed-asset resolution.

The non-performing assets of banks have increased to more than Rs 9 lakh crore and now RBI is empowered to refer the cases to Insolvency and Bankruptcy Board. In June, RBI had identified 12 large loan defaulters who account for 25% of the total bad loans in the Indian banking system.