Banking Regulation Act News

The central bank said that the penalty has been imposed as actions of HDFC Bank were found in contravention of provisions of section 6(2) and section 8 of the Banking Regulation Act, 1949. This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers, the RBI said in a statement. Notice was subsequently issued to the bank advising it to show cause as to why the penalty should not be imposed for contravention of the provisions of the Act/directions.

The banking sector is saddled with non-performing assets (NPAs) of over Rs 8 lakh crore, of which Rs 6 lakh crore is with public sector banks (PSBs).

Since the Ordinance and naming of 12 largest defaulters, the banking index gained over 5 per cent, says the report based on the stock performance between May 4 and June 13.

About 35 per cent reported tightening of credit standards for large enterprises during the first half of 2017 and about 40 percent expect further tightening in the next six months.

Bankers are meeting from Monday to finalise their next course of action on six of the 12 bad loan accounts for immediate referral to NCLT after the RBI named the largest defaulters to face bankruptcy proceedings.

Union cabinet has cleared ordinance to amend Banking Regulation Act to resolve NPA crisis on Wednesday. As per sources, President's nod is likely soon.