Supreme Court Quashes RBI’s Circular on One-day Default

  • On 2nd April, 2019, the Supreme Court (SC) on Tuesday quashed the Reserve Bank of India’s circular regarding bankruptcy proceedings against defaulters before National Company Law Tribunal (NCLT).
  • The circular, issued on February 12, 2018, directed banks to refer defaulters to bankruptcy courts if they were unable to find a resolution plan within 180 days for stressed accounts where the outstanding amount was more than Rs 2,000 crore.
  • It prescribed rules for recognising one-day defaults by large corporates and called for insolvency action as a remedy.

Supreme Court’s View

  • The Apex court held that RBI acted beyond its powers in issuing the ....
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