Page 9 - Banking Finance November 2021
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RBI CORNER
RBI has also said that responsibilities regulatory and legal status of the pri- Bank, Kumar reveals how the private
of the transferor with respect to con- vate sector company that would re- lender stepped in to help GVK attain
tinuous reporting, monitoring, filing of solve the sticky loans that the 'bad financial closure for its Navi Mumbai
complaints with law enforcement bank' acquires. project. The Rana Kapoor-promoted
agencies and proceedings related to Under the unique twin-company bank had charged a high upfront fee
such complaints shall also be trans- structure, National Asset Reconstruc- even when SBI - which was several
ferred to the ARC. "The transfer of tion Company Ltd (NARCL) - the bad times bigger and facing pressure from
such loan exposures to an ARC, how- bank in which the majority various authorities - was reluctant
ever, does not absolve the transferor given the group's stressed situation.
shareholding is with public sector
from fixing the staff accountability as banks - would buy bad loans from He has also questioned the delay in
required under the extant instructions commercial banks, while India Debt deciding on the reappointment of
on frauds," RBI said. Resolution Company Ltd (IDRCL), Kapoor, which left the RBI with no
"Due to forensic audit in all big NPAs, where private sector institutions choice but to offer a three-month ex-
in last three years, advances amount- would hold 51% equity, would focus on tension up to January for Kapoor.
ing Rs 3.83 lakh crore were declared the resolution of the loans purchased.
as fraud accounts. Now, This big "Public sector banks want the RBI to Shaktikanta Das reap-
chunk of NPAs will be available for 'recognise' IDRCL. Since IDRCL will be pointed as RBI Governor
sale to ARCs in general and specifi- responsible for running complex resolu-
cally to NARCL in case of large ad- tion processes, it may come across le- for three more years
vances with consortium lending," Hari gal challenges. These can be best The government has reappointed
Hara Mishra, director, UV ARC, said. handled if the entity has a regulatory Shaktikanta Das as the Reserve Bank
recognition," a person familiar with of India's (RBI) governor for three
RBI fines two payment more years. The re-appointment is ef-
the ongoing discussion between RBI
system operators and banks he said. "However, RBI has fective from December 10, or until
further orders, whichever is earlier.
The Reserve Bank of India has im- certain reservations about this because
posed monetary penalties on two pay- existing regulations have no provisions "The Appointments Committee of the
ment system operators - Paytm Pay- for such a structure," he said. Cabinet has approved the reappoint-
ments Bank Ltd (PPBL) and Western ment of Shaktikanta Das as Reserve
Union Financial Services (WUFSI) - as RBI should've acted on Bank of India Governor for a period of
deficiencies were found in regulatory YES Bank 5 months earlier three years beyond 10.12.2021 or un-
compliance. The RBI imposed a Rs 1 til further orders, whichever is ear-
crore monetary penalty on Paytm Former State Bank of India chairman lier," an official statement stated.
Payments Bank for an offence com- Rajnish Kumar has said in his book Shaktikanta Das has vast experience in
mitted under the Payment and Settle- that the Reserve Bank of India should various areas of governance and has
ment Systems Act, 2007. have sacked the Yes Bank board five held important positions in the Central
months earlier in November 2019 as
Besides, the regulator has imposed a the bank was already losing deposits and State Governments in the areas of
monetary penalty of over Rs. 27 lakh and defaulting on reserve require- Finance, Taxation, Industries, Infrastruc-
on the WUFSI for non-compliance ments. ture, etc. He is a postgraduate from
with certain provisions of the direc- St. Stephen's College, Delhi University.
tions contained in the 'Master Direc- In his book, 'The Custodian of Trust', During his long tenure in the Ministry
tion on Money Transfer Service the former SBI chairman has provided of Finance, Government of India, he
Scheme' (MTSS Directions). some behind-the-scenes glimpses of was directly associated with the
what went into resolving something preparation of as many as 8 Union
PSU banks seek RBI over- that appeared as a Lehman Brothers Budgets. Das has also served as
moment for India. It was during his
sight on IDRCL for smooth tenure that the financial sector was India's Alternate Governor in the
World Bank, Asian Development Bank
NPA resolution hit by the triple failure of IL&FS, DHFL (ADB), New Development Bank (NDB)
PSU lenders and the Reserve Bank of and Yes Bank. and Asian Infrastructure Investment
India (RBI) are trying to sort out the Giving a hint of the workings of Yes Bank (AIIB).
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