PW Bureau
Because the RBI had cancelled all its previous restructuring schemes when it brought out the February 12 circular, banks will now have to individually look at resolution plans
Mumbai: The Supreme Court struck down on Tuesday the Reserve Bank of India's (RBI) February 12 circular which laid out rules for banks to recognise accounts as defaults if the borrower defaulted on payments by one day and to start insolvency action as a remedy. "We have declared the RBI circular ultra vires," Justice Rohinton F Nariman said while announcing the judgment.
Because the RBI had cancelled all its previous restructuring schemes when it brought out the February 12 circular, banks will now have to individually look at resolution plans.