While presenting the General Budget 2016-17 in Lok Sabha today, the Union Finance Minister Shri Arun Jaitley said that in the financial sector, a comprehensive Code on Resolution of Financial Firms will be enacted. Together with the Bankruptcy and Insolvency Law, this will fill a major systemic vacuum. This is a major reform measure. Announcing more financial sector reforms, he said new derivative products will be developed by SEBI in the commodity derivatives market. Statutory basis will be provided for a Monetary Policy framework and a Monetary Policy Committee through the Finance Bill 2016. A Financial Data Management Centre will also be set up to facilitate integrated data aggregation and analysis in the financial sector.

SARFAESI Act is to be amended to strengthen Asset Reconstruction Companies. This will help in dealing with stressed assets of Banks. In the plan for revamping of Public Sector Banks (PSB), he announced :–

a.  allocation of ₹ 25,000 crore towards recapitalisation of PSBs;

b. roadmap to be spelt out for consolidation of PSBs;

c.  considering reduction of Government equity in IDBI Bank to 49% of below;

d. Debt Recovery Tribunals (DRTs) to be strengthened with computerized processing of court cases.

Code on Resolution of Financial Firms to establish a statutory resolution framework alongside insolvency law, strengthening bank recovery measures. A statutory Code on Resolution of Financial Firms will be enacted to create a comprehensive resolution framework alongside the insolvency law. Complementary measures include statutory provision for a Monetary Policy framework and Monetary Policy Committee, establishment of a Financial Data Management Centre, development of new commodity derivative products, amendment of the SARFAESI Act to strengthen Asset Reconstruction Companies, strengthening computerized Debt Recovery Tribunals, and recapitalisation and consolidation measures for Public Sector Banks.