Page 7 - Banking Finance July 2017

BANK UPDATE

BANKING

NEWS
NEWS
NEWS
NEWS
NEWS

Insolvency framework Joint Audit for Private Banks proposes ICAI
soon for banks, insurers The Institute of Chartered Accounts of India (ICAI) as the regulatory body gov-
erning auditors, has proposed the introduction of the con-
The Cabinet recently gave its nod for
the intro- cept of joint audit in private banks to enhance the quality of
duction of audit to the finance ministry and the Reserve Bank of India
(RBI). Consequently arises the question over role of auditors
the Finan-
in estimation of non-performing assets (NPAs) of some pri-
cial Resolu-
tion and De- vate sector banks. Recently three private lenders - YES Bank,
posit Insur- Axis Bank and ICICI Bank - had reported gross NPA figures in FY2015-16 that
ance Bill, 2017 (FRDI), in Parliament. were in variance of the RBI's estimations.
The Bill seeks to cut down the time Bankers' meet to decide on large defaulters
and costs involved in resolving the
problem of distressed entities. Recently a Bankers' meet was held to finalise the next course of action on six of
the 12 bad loan accounts for immediate referral to
It will create a framework to deal
NCLT after the RBI named the largest defaulters to
with bankruptcy in banks, insurance
face bankruptcy proceedings.
companies and financial sector enti-
The first set of six troubled accounts are Bhushan
ties. Once enacted, it will also lead
Steel (Rs 44,478 crore), Essar Steel (Rs 37,284
to the establishment of a Resolution
Corporation. crore), Bhusan Power and Steel (Rs 37,248 crore), Alok Industries (Rs 22,075
crore), Amtek Auto (Rs 14,074 crore) and Monnet Ispat (Rs 12,115 crore), told
The proposal is aimed at giving com- by banker. According to RBI, these 12 accounts owe Rs 2.5 trillion to the sys-
fort to consumers of financial service tem, which constitute around 25 % of gross bad loans.
providers in instances of any financial
distress by strengthening and stream- E-payment helplines coming up soon
lining the current framework of de- The government is working to set up a toll-free phone number 14442 for griev-
posit insurance for retail depositors.
ance redressal of customers related to digital pay-
The Resolution Corporation will pro- ments. The Ministry of Electronics and IT along
tect the stability and resilience of the with National Payments Corporation of India is
financial system by protecting con- creating a mechanism to provide a common num-
sumers of covered obligations up to ber 14442, where customers of all digital pay-
a "reasonable limit" and by protect- ments platform, including mobile wallets, Unified
ing public funds "to the extent pos- Payments Interface and BHIM, will be able to reg-
sible," an official release said. ister their complaint.

BANKING FINANCE | JULY | 2017 | 7

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