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Banking sector

→ Concerns

→ Twin Balance sheet problem

→
Economic
survey
2016 -

it
acknowledges lkat one of the critical

confronting
challenges
the Indian Is TBS problem
economy
→

Bls Banks slowdown

• •

TBS . Investment * in economic

weak
slowdown
grown
→
• •
Bls corporate

Increase in NPAS
→
decline in
decrease
'

in
•
•
investment
In to
increase NPAS •
less
Money eco .

•
growth
•

in Banks lend in
decline
low
employment
•

demand
norms
→
Regulatory
CAR of PSBS has declined steadily
→

Poor
→
governance
→
nexusinfluential with business
lack of transparency in
→
lending
→ interference by gout
→ Role of RBI
→ curtailment of RBIs independence
→ need constant monitoring of banks
Poor transmission
> monetary policy
→ Banks not
reducing the interest rate even if RBI reduces the
benchmark lending rate

→
implications of technology
→ challenges due to security risks
divide
→
digital
activities
→
fraudulent
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steps taken
→

→ RBI
→ Prompt Corrective Achin framework CPCA )
→ Domestic
systemically Important Banks CDABD
→
Categorisation of HPAS -
SMAO ,
Smar etc
→ Joint Lenders Forum

→
Parliament
→ IBC

→ Amendment to RBI Act

→
FRDI Bill C withdrawn )

→ Gout
→ Rationalisation q Consolidation of PSBS
→ Recapitalisation of PSBS
the next
→ infuse 2.11 lakh crore fresh capital to PSBS over

two
years
18000
Budget Cr

Market 58000 Cv

Recap Bonds 1.35 lakh ( r

Pros Cons

→ enhance flow of credit annual interest cost of 9000 crore

revive result in
→ economy not
going to
recovery
investment of bad
→
revive put loans

→
lnaradhanush plan

A B C D E F G

Appointments Banks capitalisation De Empowerment Framework

Stressing governance
-

Board of Accountability reforms

Bureau

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→ Reforms
→ Responsive and Responsible PSBS - EASE 67 hemes

Customer
s Responsiveness

2 Responsible Banking

Enhanced 3 Credit off .

take
Access q
Service 4 Udyami Mitra for msmes

Excellence

Financial inclusion 4
5
Deepening Digitisation

6
Ensuring outcomes -

Governance MR

Economic
→
Survey
→
2015-16

Recognition
Recapitalisation
4Rs Resolution
Reform

→ 2014-15
Deregulation
Differentiation
413 Diversification
Disinterring

→ 2016-17 PARA Public sector Asset Rehabilitation

Agency
→ RBI
→ Public Credit Registry

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Fugitive Economic offenders Act

→ Some recent cases

Modi and Mehylchowksi
→ Vijay mallya Case ,
Nirav case

→ objective
→
It aims at the of properties of economic offenders who
have fled the
country
to avoid
facing criminal prosecution

confiscation
→ Salient features
Economic offender Is Individual against whom a warrant for
→ any
-

arrest in relation to a scheduled ofknie has been issued who

leaves Or has left India so as to avoid criminal prosecution or

refuses to return to India face criminal

to prosecution
deals with amounts

Rsloo
→
It cases
Involving crore or More

→
it makes provisions for setting up of special courts
→
Power to confiscate any property of the accused in India or abroad

Pros cons

→
Limiting the amount of economic

→ to deter white collar crime

offence at Rs 100 crore or more

→ many economic offenders fled the → provision to seize the property

Country criminal proceedings of the alleged FEO before
anticipating
even

resolution and of the conviction basic

→ recovery goes against
assets are
imp for country 's freedoms granted under constitution
health multitude of
economic → Already have a
civil and criminal laws laws PMLA
→ existing viz
,
BTPA ,
IBC

are insufficient etc

,
it will deter economic offenders →
The major reason Is not want of
from evading the process of laws but lack of political will and
Indian law corruption

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Prevention of money Laundering Act

→ Govt amended the PMLA 2002

→ Amendments
Definition of proceeds of and
'

→ crime
'

expanded so that ED can attach

confiscate proceeds against property equivalent to proceeds to

crime held Outside the

country also

→
the bail Conditions will be made uniform for all the offences under
PMLA instead of only those which liable to imprisonment
offences are

of more than 3 years

→ corporate frauds to be included as scheduled offence under PMLA

→
Measures to enhance
effectiveness of investigations to provide further
time to ED to
file prosecution and pass a provisional
attachment
Order

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