Lakshya UPSC PT 2022 – Economic Lecture – 2 – Complete One Year Current Affairs

Table of Contents

News –

RBI brings Non-Banking Financial Companies under the ambit of Prompt Corrective Action Framework

Prompt Corrective Action

It is a framework under which ﬁnancial institutions with weak ﬁnancial metrics are put under watch by the RBI
The scheme was initiated by RBI in 2002, in order to protect the interest of the investor
Initially it was applicable on banks only but now RBI has brought NBFC also under this ambit.
Following are the ﬁnancial metrics or regulatory triggers used by RBI-

News –

Central Government guarantee of Rs.30,600 crore to back Security Receipts issued by National Asset Reconstruction Company Limited (NARCL) for acquiring stressed loan assets

NARCL is an ARC which will acquire the stressed assets from Whereas the responsibility to dispose and recover the money will be of IDRCL.
Deposit Insurance and Credit Guarantee Corporation Act, 1961

News –

DICGC Bill 2021 has been approved by the Union Cabinet making an amendment to The DICGC Act of 1961

Interim payments from the DICGC will be made to certain depositors for 90 days
For banks to make timely payments to the DICGC, provisions for penal interest are in place.
Prior RBI permission is required to remove the previous premium ceiling of 15% and revise.

News

Recently, Parliament passed the Insolvency and Bankruptcy Code (Amendment Bill) in 2021 in the Lok

It introduced an alternate insolvency resolution process for Micro, Small, and Medium Enterprises (MSMEs) with defaults up to Rs 1 crore called the Pre-packaged Insolvency Resolution Process (PIRP).
PPIR is a form of restructuring that allows creditors and debtors to work on an informal plan and then submit it for Under this system, ﬁnancial creditors will agree to a potential investor’s terms.
The PIRP also allows for a Swiss challenge to the resolution plan. A Swiss Challenge is a method of bidding, often used in public projects, in which an interested party initiates a proposal for a contract or the bid for a project.