The Supreme Court of India recently passed an order striking down a circular that was issued by the Reserve Bank of India (the RBI) in February lastyear (the Circular). The Circular was aimed at getting lending banks and financial institutions to proactively identify and manage stressed assets in a time bound manner, failing which the asset was required to be referred for insolvency resolution. The Supreme Court held the Circular to be unconstitutional, simply because it went outside the remit of what the law permitted the RBI to do. A case in point of an Indian regulator taking an initiative that could not withstand the test of judicial scrutiny!
Click to read more – Key Developments under the Indian Insolvency Regime