Does the Banking Regulation Act, 1949, allow transfer of non-performing assets (NPAs) by banks? Ruling in ICICI Bank Limited v Official Liquidator of APS Star Industries Ltd & Ors, the Supreme Court held that a bank can deal in NPAs as part of its credit appraisal process and for the purpose of cleaning up its balance sheets. The court said that banks in doing so are following guidelines issued by the Reserve Bank of India that have been issued in accordance with section 21 read with section 35A of the Banking Regulation Act, 1949.
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The update of court judgments is compiled by Bhasin & Co, Advocates, a corporate law firm based in New Delhi. The authors can be contacted at lbhasin@bhasinco.in or lbhasin@gmail.com. Readers should not act on the basis of this information without seeking professional legal advice.
