27 January, 2020
3 Min Read
Prelims and Mains focus: About the proposed law and key changes to be brought by it; its advantages; about FRDI Bill; NBFCs
News: The Finance Ministry is working on putting in place a comprehensive resolution framework for financial institutions that have precarious financial position.
What is it for?
It is to ensure that failure of some of the systemically important financial institutions does not affect the entire system.
About the proposed framework
Ambit of resolution authority
Changes likely to be in FRDI Bill
A framework for resolution is required even for banks, insurance companies, mutual funds, securities market companies, so that their failure does not affect the financial system adversely. The proposed law is aimed at addressing this issue at the broader level.
Source: Indian Express
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