News:Finance ministry is planning to setup a Resolution authority to curb failure of large financial institutions.
About the Resolution authority:
- The Resolution authority aims to address the issue of insolvency of firms in the financial sector.
- The authority would comprise of members from financial sector regulators as well as senior government officials as its members.
- The ambit of the authority is likely to be over banks, NBFCs, insurance companies, securities market players, co-operative banks and regional rural banks.
- Under it,if a bank,NBFC or other insurance company fails,a solution will be available to either sell that firm, merge it with another firm or close it down.This will ensure least disruption to the economy and to investors and other stakeholders.