The global financial crisis and the failure of several banks and financial institutions in its aftermath made a strong case for an effective resolution regime for banks and financial institutions in India.
While the Financial Sector Legislative Reforms Commission (FSLRC) had recommended a separate resolution authority in 2013, it would have taken several years to implement that reform. This report emphasized the importance of having interim arrangements that could empower the Reserve Bank of India (RBI) for facilitating efficient and speedy resolutions.
Across three main parts, it highlighted the need for a stronger and more efficient resolution regime in India. In the first part, it evaluated India’s fragmented resolution regime and outlined its limitations. In the second part, it discussed international best practices on resolution frameworks that could be implemented in India.
In the third Part, it discussed its main recommendations through the lens of three primary questions –(i) How could the RBI be empowered to have greater resolution powers in relation to the financial firms governed by it? (ii) How could the existing deposit insurance mechanism be strengthened? and (iii) What could be some of the additional resolution tools that the RBI could resort to under its then existing powers?
Among other measures, the report recommended the establishment of separate resolution authority within RBI.
About the Authors
Debanshu is one of Vidhi’s Co-Founders. He has over a decade of experience in commercial laws and the financial sector and has advised the Government of India on several legislative projects in this space. He was instrumental in advising the Government on the design and drafting of the Insolvency and Bankruptcy Code and its subsequent implementation. He has developed and curated Vidhi’s work on insolvency law, corporate law, financial regulation, and competition law and conceptualized its Bankruptcy Research Program. He has served as a member of a Government-appointed committee for operationalizing the National Company Law Tribunal and deposed before two Parliamentary committees examining financial sector legislation. He has also worked as a teaching fellow at Harvard Law School.
He is an alumnus of the Harvard Law School, the University of Oxford, and Hidayatullah National Law University. He attended Harvard as a Fulbright Scholar and was awarded the Irving Oberman Memorial Prize in Bankruptcy and the Dean’s scholar prize in Corporations. He was also awarded a Distinction for his graduate studies at Oxford. In 2017, he was selected for NYU School of Law’s Hauser Global Scholarship, which he waived. His academic work has been published in peer-reviewed journals and an edited book published by Cambridge University Press, New York. He has been consulted by and mentioned in global business publications, such as IFR Asia and The Economist. Earlier, Debanshu practiced as an M&A and regulatory lawyer with AZB & Partners at its Mumbai and New Delhi offices.
Arghya is the Founder and Research Director at Vidhi. His areas of specialisation are constitutional law and regulation of the digital economy. He has served on a number of government committees including the B.N. Srikrishna-led committee of experts on a data protection framework for India.
Arghya has a number of academic publications on the Supreme Court and the Constitution in leading law journals such as Law Quarterly Review and Public Law. He is also a columnist at The Telegraph and The Times of India. He has most recently authored a book “Independence and Accountability of the Indian Higher Judiciary” (Cambridge, 2019) which builds on his doctoral work at Oxford University. Prior to founding Vidhi, he was at Oxford as a Lecturer in Administrative Law at Pembroke College.
Shreya is a Senior Resident Fellow, and leads the work at the intersection of law, finance and development at Vidhi. She is currently focusing on independent research work relating to financial inclusion, tech and corporate governance. She has worked on several engaged projects with the International Financial Services Centres Authority, Ministry of Corporate Affairs and the Insolvency and Bankruptcy Board of India. Shreya completed her LLB from National Law University, Jodhpur in 2012 and LLM from Queen Mary, London on a Chevening scholarship in 2019. She also worked with the European Bank for Reconstruction and Development, London in 2019. Prior to joining Vidhi in 2014, she worked as an Associate at Luthra & Luthra Law Offices, New Delhi.
Ritwika is a Senior Resident Fellow and Lead at Charkha, Vidhi’s Constitutional Law Centre. Her current research is focused on comparative federalism, local governments, and electoral reforms. From 2014-17, Ritwika was a Research Fellow in the Public Law vertical at Vidhi. She advised several departments and regulatory authorities under the Government of India, on questions concerning constitutional validity of proposed legislation, legislative competence of the Union and states, and contours of the powers and functions of regulators. Ritwika also assisted the Union of India in preparing its written submissions in the National Judicial Appointments Commission (NJAC) Case. Between 2019-2020, Ritwika worked as a Research Associate at DAKSH, Bengaluru. She obtained her LL.M. from the University of Cambridge in 2018. She graduated with a B.A. LL.B. (Hons.)) from the Indraprastha University, Delhi in 2013, and the LL.M. from the NALSAR University of Law, Hyderabad in 2014. Ritwika is the co-editor of “Appointment of Judges to the Supreme Court of India: Transparency, Accountability and Independence” (Oxford University Press, 2018), a volume of essays addressing the politics, doctrine, and crucial developments pertaining to judicial appointments in India.
Subramanian Natarajan was a Project Fellow at the Vidhi Centre for Legal Policy.