Nirmala Sitharaman, the Union Minister of Finance, highlights the comprehensive approach adopted by the Modi government to address the challenges faced by the Indian banking sector. In her statement, Sitharaman emphasizes the government’s commitment to improving the sector’s performance and ensuring its stability through various measures and reforms.
Insolvency and Bankruptcy Code (IBC): A Catalyst for Recovery:
Sitharaman highlights the significance of the Insolvency and Bankruptcy Code (IBC), which was introduced in 2016. The IBC has played a crucial role in expediting the recovery of bad loans and resolving insolvency cases. By providing a streamlined and time-bound framework for debt resolution, the IBC has contributed to the strengthening of the banking sector and instilled confidence among lenders and investors.
Enhanced Deposit Insurance Cover for Customer Protection:
To safeguard the interests of customers and instill confidence in the banking system, the Modi government has raised the Deposit Insurance cover to Rs 5 lakh. This move ensures that depositors’ funds are protected, even in challenging circumstances. Sitharaman highlights this significant step taken by the government to reassure customers and strengthen the overall stability of the banking sector.
National Asset Reconstruction Company Limited (NARCL) for Effective Recovery:
In her statement, Nirmala Sitharaman underscores the formation of the National Asset Reconstruction Company Limited (NARCL). This entity has been established to facilitate the efficient and timely resolution of stressed assets, leading to their recovery. The NARCL aims to address the issue of Non-Performing Assets (NPAs) and improve the overall health of the banking sector by effectively managing and recovering distressed assets.
A Comprehensive Approach to Banking Sector Improvement:
Nirmala Sitharaman highlights that the Modi government has adopted a comprehensive approach to ensure the performance and stability of the Indian banking sector. The measures implemented, such as the IBC, enhanced deposit insurance cover, and the establishment of NARCL, demonstrate the government’s commitment to addressing challenges and fostering a resilient banking system.
