The Reserve Bank of India (RBI) has expanded the oversight committee by appointing three more members to the high-level panel that will vet the process to resolve mounting bad loans bogging down the banking sector. Former chief vigilance commissioner Pradeep Kumar will head the now 5-member panel that will work through multiple benches, the central bank said in a statement.
The expansion follows promulgation of the Banking Regulation (Amendment) Ordinance, 2017 last month. The ordinance had outlined the reconstitution of the Overseeing Committee (OC) with an expanded mandate.
"The Reserve Bank has since brought the OC under its aegis. The OC will, for the present, have five members, including a chairman, and will work through multiple benches as may be necessary and constituted by the Chairman to opine on the cases referred to it by the banks," it said.
The reconstituted OC will work with an expanded mandate to review, in addition to cases being restructured under the Scheme for Sustainable Structuring of Stressed Assets (S4A), resolution of other cases where the aggregate exposure of the banking sector to the borrowing entity is greater than Rs 500 crore, it said.
"The circular advising the banks of the above changes and other details of the process to be followed by banks for resolution of identified stressed assets within six months will be issued separately," it said.
Besides Kumar, the other members of the committee are former SBI Chairman Janki Ballabh, former Canara Bank Chairman and Managing Director MBN Rao, former Chairman and Managing of L&T Finance YM Deosthalee and S Raman, member SEBI. Raman would be inducted into the panel from September 7, 2017 after he completes the term at SEBI.
On May 22, RBI had said it will reconstitute the OC under its aegis to operationalise the banking ordinance for resolving the issue of bad loans that have soared to over Rs 8 lakh crore. The ordinance authorises RBI to issue directions to banks to initiate insolvency resolution process in respect of a default under the provisions of the IBC.