Congress leader and former Union finance minister P Chidambaram Wednesday targeted the BJP for its “wrong policies” and “wrong approach” that drove companies in the steel, power and coal sectors into insolvency. He also criticised the party for its “one-size-fits-all” approach to the NPA problem.
Congress leader and former Union finance minister P Chidambaram Wednesday targeted the BJP for its “wrong policies” and “wrong approach” that drove companies in the steel, power and coal sectors into insolvency. He also criticised the party for its “one-size-fits-all” approach to the NPA problem.
Chidambaram’s comments come a day after the Supreme Court struck down the Reserve Bank of India’s controversial ‘February 12, 2018, circular’, which replaced all earlier guidelines on the resolution of stressed assets with a new framework. Issued when Urjit Patel was Governor of the central bank, the circular introduced a one-day default norm — “As soon as there is a default in the borrower entity’s account with any lender, all lenders — singly or jointly — shall initiate steps to cure the default”.
Chidambaram said the Congress is “vindicated” by the apex court’s judgment.
“Congress’ manifesto criticised the BJP government for its one-size-fits-all approach to the NPA problem. Today, we are vindicated by the Supreme Court’s judgement,” he tweeted. “The BJP government’s wrong policies broke the back of companies in the steel, power and coal sectors. Its wrong approach drove those companies into insolvency.”
In its manifesto released Tuesday, the Congress promised to respect the autonomy of the RBI and reverse the “unwarranted and illegal interference by the BJP government” into its functioning.
A bench of Justices R F Nariman and Vineet Saran on Tuesday found that the circular was ultra vires of Section 35AA of the Banking Regulation Act, 1949. It ruled that as a result “all actions taken under the said circular, including actions by which the Insolvency Code has been triggered must fall along with the said circular”.
The SC was hearing a clutch of petitions by companies from the power and shipping sectors, which argued that the RBI’s “one-size-fits-all” approach was impractical.
Chidambaram’s comments come a day after the Supreme Court struck down the Reserve Bank of India’s controversial ‘February 12, 2018, circular’, which replaced all earlier guidelines on the resolution of stressed assets with a new framework. Issued when Urjit Patel was Governor of the central bank, the circular introduced a one-day default norm — “As soon as there is a default in the borrower entity’s account with any lender, all lenders — singly or jointly — shall initiate steps to cure the default”.
Chidambaram said the Congress is “vindicated” by the apex court’s judgment.
“Congress’ manifesto criticised the BJP government for its one-size-fits-all approach to the NPA problem. Today, we are vindicated by the Supreme Court’s judgement,” he tweeted. “The BJP government’s wrong policies broke the back of companies in the steel, power and coal sectors. Its wrong approach drove those companies into insolvency.”
In its manifesto released Tuesday, the Congress promised to respect the autonomy of the RBI and reverse the “unwarranted and illegal interference by the BJP government” into its functioning.
A bench of Justices R F Nariman and Vineet Saran on Tuesday found that the circular was ultra vires of Section 35AA of the Banking Regulation Act, 1949. It ruled that as a result “all actions taken under the said circular, including actions by which the Insolvency Code has been triggered must fall along with the said circular”.
The SC was hearing a clutch of petitions by companies from the power and shipping sectors, which argued that the RBI’s “one-size-fits-all” approach was impractical.