Aims to deal with financial sector crisis and protect interest of customers.
Provisions:
- The Bill would provide for a comprehensive resolution framework for specified financial sector entities to deal with bankruptcy situation in banks, insurance companies and financial sector entities.
- The Bill when enacted, will pave the way for setting up of the Resolution Corporation. It would lead to repeal or amendment of resolution-related provisions in sectoral Acts as listed in Schedules of the Bill.
- It will also result in the repealing of the Deposit Insurance and Credit Guarantee Corporation Act, 1961 to transfer the deposit insurance powers and responsibilities to the Resolution Corporation.
- The Resolution Corporation would protect the stability and resilience of the financial system; protecting the consumers of covered obligations up to a reasonable limit; and protecting public funds, to the extent possible.
- The bill also seeks to give comfort to the consumers of financial service providers in financial distress.
- It also aims to inculcate discipline among financial service providers in the event of financial crises by limiting the use of public money to bail out distressed entities.
- The new bill will complement the Insolvency and Bankruptcy Code, 2016 by providing a comprehensive resolution framework for the financial sector. The Insolvency and Bankruptcy Code, 2016 was enacted recently to deal with the insolvency of non- financial entities