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Ordinance to break ‘paralysis’ on NPAs: Arun Jaitley




New Delhi, May 5 : The government on Friday promulgated an ordinance empowering the RBI in a big way to deal with the crisis of huge bad loans of banks to break the “paralysis” that prevails in the name of autonomy by initiating insolvency process against defaulters and formation of oversight committees.

The government has also issued a separate order authorising the RBI to exercise jurisdiction under Section 35AA under the ordinance that aims at tackling the mounting bad loans estimated at over Rs 6 lakh crore in the case of public sector banks.

Briefing media on the features of the ordinance, Finance Minister Arun Jaitley said that a number of steps will be taken to revitalise public sector banks, including those relating to sale of assets, closure of non-profitable branches and reduction of overheads when MoUs are signed with them when they seek recapitalisation.

The ordinance was notified this morning after President Pranab Mukherjee signed the executive order late last night on the recommendation sent by the Cabinet on Wednesday night.

Declining to go into details of the big defaulters or the timeline to recover the bad debts, Jaitley said there is a list of stressed assets which Reserve Bank of India (RBI) would be looking at.

“Paralysis in the name of autonomy is detrimental to the economy. One of the objectives behind issuing the ordinance is that the present status quo cannot continue. The present status quo is that nothing is moving. Therefore there is paralysis in the name of autonomy and that should be broken,” he said.

He said one of the objectives would also be that bankers take commercial decisions on the basis of commercial considerations and business decisions will be protected. Oversight committees being set up under the ordinance will give sufficient comfort to the commercial decisions.

Giving the background to the decision to bring the ordinance, he said banks necessarily need to be in a robust position to support growth and if they have unacceptably high level of non-performing assets (NPAs), it hinders their capacity.

In order to empower the RBI in this effort, he said Section 35A was being amended by insertion of Sections 35AA and 35AB. Section 35A deals predominantly with policy directives and matters that relate to the functioning of the banking companies and their policies.

Jaitley said the RBI required to be empowered in relation to specific stressed assets also. “It was doubtful whether the language of Section 35A covered this empowerment and therefore it was felt necessary that RBI should be empowered in this direction.”

Tracing the steps taken by the government to deal with the problem, he said that in 2016 the government had enacted the Insolvency and Bankruptcy Code along with substantial amendments to SARFAESI and Debt Recovery Acts in order to ensure expeditious recovery of outstanding debts to banks and financial institutions.

The RBI has been simultaneously exercising its own authority under the Banking Regulation Act.

The minister said there was the Joint Lenders’ Forum (JLF) framework prescribed by the RBI, which was currently functioning. “Over the last few years we have been able to bring about certain structural reforms to the economy. One of the key problems that remains is that of stressed assets. Banks necessarily need to be in a robust position to support growth and if they have unacceptably high levels of NPAs, it hinders their capacity.”

He said the first part of the ordinance relates to the issuance of the government authorising RBI to initiate the insolvency and bankruptcy proceedings relating to stressed assets and the second to specific directions for formation of oversight committees.

In relation to resolution of the specific accounts either within the bankruptcy insolvency framework or under any other JLF framework, the RBI will be empowered to deal with this matter, he said.

He said there were some other steps being taken. “We are also planning the process that when MoUs are signed with public sector banks, which seek capitalisation then there would be specific provisions in those memorandum of understanding (MoUs) which will be incorporated. They would relate to immediate cash relief initiatives such as sale of assets, closure of non-profitable branches, reduction of overheads, business turnaround initiatives such as strengthening credit appraisal processes under active NPA management and several others.”

He said that the RBI and government will continue to work together towards expeditious resolution of the challenge of stressed assets.

“The empowerment of RBI, I hope will enable the issuance of several directions and steps in this regard. This is an ongoing process in which there are resolutions. The JLF resolution took time and without the full approval of the bank, the process used to get delayed. In this connection also, there can be directives and empowerment to RBI,” he added.

The minister said the RBI steps will bind everyone under the ordinance. “This will expedite commercial decision making. Keeping the health of the banks intact is one of the focus points of RBI.”

Replying to questions he said, “The regulation and to ensure the health of the banking system is one of the primary responsibilities of the RBI. Conventionally, under the Act even powers under 35A was with RBI. So it’s only logical that powers under 35AA and 35AB also remain with RBI.”

“This action (ordinance) will have a direct impact on effective resolution of stressed assets, particularly in consortium or multiple banking arrangements as the RBI will be empowered to intervene in specific cases of resolution of NPAs to bring them to a definite conclusion.”


Delhi Riots: Jamia student released on parole to sit for exams

The court said that clearing the exams is necessary for Tanha to pursue M.A. in Persian, and that leniency must be shown to the accused by allowing him to appear for the said exams.




Asif Iqbal Tanha

New Delhi: A Delhi court on Friday released Jamia Millia Islamia student Asif Iqbal Tanha — who was arrested under the stringent Unlawful Activities (Prevention) Act for allegedly hatching a conspiracy to organise riots in North-East Delhi in February this year — on three-day custody parole to appear for his compartmental examination in December.

Tanha, who is pursuing his B.A. (Hons) in Persian, had moved the court seeking interim bail from November 30 to December 7 to prepare for three backlog exams scheduled to be held on December 4, 5 and 7.

“The court deems it fit to allow the accused on custody parole for appearing in the said examinations. Accordingly, custody parole is granted to accused Asif Iqbal Tanha on December 4, 5 and 7,” Additional Sessions Judge Amitabh Rawat ordered.

The court said that clearing the exams is necessary for Tanha to pursue M.A. in Persian, and that leniency must be shown to the accused by allowing him to appear for the said exams.

After advocate Sowjhanya Shankaran, representing Tanha, submitted that her client didn’t not have the required reading material to prepare for the exams, the judge directed the Tihar Jail superintendent to provide necessary assistance, provided it is within the permissibility of the jail rules.

Tanha was arrested on May 19 in connection with the case and has been in the custody since then. On October 21, he was granted one-day interim bail for taking the entrance examination for M.A Persian at the Jamia Milia Islamia University.

In September, his named figured in the chargesheet filed by the Delhi Police in connection with the riots that broke out in North-East Delhi in February after clashes between pro and anti-Citizenship Amendment Act supporters spiralled out of control, leaving 53 people dead and 748 injured.

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India enters recession: GDP drops by 7.5% in July-September quarter

The National Statistical Office (NSO) data on Friday showed that the Q2FY21 GDP on a year-on-year basis contracted by (-) 7.5 per cent from (-) 23.9 per cent in the preceding quarter.




National debt under Modi govt surges

New Delhi: Even though India’s economic recovery accelerated in Q2FY21 from the lows of the pandemic-induced lockdown, the country for the very first time since Independence entered into a technical recession.

The National Statistical Office (NSO) data on Friday showed that the Q2FY21 GDP on a year-on-year basis contracted by (-) 7.5 per cent from (-) 23.9 per cent in the preceding quarter.

Though not comparable, the GDP had grown by 4.4 per cent in the corresponding quarter of FY2019-20.

In financial parlance, an economy is said to have entered a technical recession after it consistently remains in the negative output territory for two subsequent quarters.

This trend underscores the reduction in purchasing power along with lower tax collection for the government, likely defaults on debt and falling Capex spends.

According to the NSO, the GDP at ‘Constant (2011-12) Prices’ in Q2FY21 is estimated at Rs 33.14 lakh crore as against Rs 35.84 lakh crore in Q2FY20, showing a contraction of 7.5 per cent as compared to 4.4 per cent growth in Q2FY21.

“Quarterly ‘GVA at Basic Prices at Constant (2011-12) Prices’ for Q2 of 2020-21 is estimated at Rs 30.49 lakh crore, as against Rs 32.78 lakh crore in Q2 of 2019-20, showing a contraction of 7 per cent,” the NSO said in the estimates of Q2FY21 GDP.

“With a view to contain the spread of the Covid-19 pandemic, restrictions were imposed on the economic activities not deemed essential during Q1. Though the restrictions have been gradually lifted, there has been an impact on the economic activities,” it added.

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Black Friday Deals: Realme to bring offers on Realme X3 Superzoom, X50 Pro, Buds Air Neo and more

The Black Friday sale will take place on Realme’s online store, Flipkart and Amazon.



Realme X2 Pro

Over the last few years, online and offline retailers have been offering their Black Friday deals for almost an entire week ahead of Thanksgiving, and some of these deals and offers last well after the Cyber Monday sale.

Black Friday Sale is here!!

After Xiaomi, handset maker Realme on Thursday announced a Black Friday Sale that would arrive with several offers and discounts on a range of its products. The Black Friday Sale would be live for 24 hours and would start November 27, 12:00 AM. The sale would see massive discounts on a range of Realme smartphones including Realme 6i, Realme 6, Realme X3 Superzoom and X50 Pro, and various AIoT products such as Realme Buds Classic, Realme Smart Watch, Realme Buds Air Neo and Realme Smart Cam 360°.

“Realme would also be hosting the ‘Realme Days’ sale offering similar discounts on its own website Realme.com, Flipkart and Amazon.in,” the company said in a statement.

The Black Friday sale will take place on Realme’s online store, Flipkart and Amazon. In addition to the discounts, SBI credit cardholders can avail of 5% cashback on EMI transactions.

  • Realme is offering discounts from Rs 1,000 up to Rs 7,000 for its Black Friday sale. Realme X50 Pro has received the biggest discount of Rs 7,000 bringing its price down to Rs 34,999 from Rs 41,999. Realme X50 Pro with 12GB RAM and 256GB storage also gets a discount making its offer price Rs 40,999.
  • Realme X3 SuperZoom will be available with a Rs 4,000 discount on all three variants. Realme X3 has also received a Rs 3,000 discount on both its variants. Realme C3, Realme 6, Realme 6i, and Narzo 20 Pro can be purchased with a discount of Rs 1,000.
  • In the AIoT portfolio, Realme Buds Air Neo would be available at a discounted price of Rs 1999, along with the Realme Buds Wireless Pro for Rs 3199 and Realme Buds Air Pro at a special price of Rs 4299. These offers would be applicable on all purchases made through Realme’s official website Realme.com.
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