President Pranab Mukherjee gives nod to ordinance on banks’ non-performing assets

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President Pranab Mukherjee has given his nod to the ordinance dealing with the banking sector’s non-performing loans and the amendment to the Banking Act

What is Ordinance?

ORDINANCE – it is promulgated by the President/Governor when the Parliament/Legislative Assembly is not in session; it has the same effect as that of an Act passed by the legislature; it has to be approved by the legislature within 6 weeks of reassembly of the legislature.

What is the ordinance power of the president?

 Under the Constitution, the power to make laws rests with the legislature. However, in cases when Parliament is not in session, and ‘immediate action’ is needed, the President can issue an ordinance(Under article 123) .An ordinance is a law, and could introduce legislative changes

What is the ordinance power of the Governor?

The Governor can also promulgate the ordinances to amend or to repeal not only another ordinances but also any law passed by the State Legislature, subject to the limitation prescribed under Article 213(1) (a) and even allow the ordinance to operate retrospectively from a date, when the Legislature was in session.


A nonperforming asset (NPA) refers to a classification for loans on the books of financial institutions that are in default or are in arrears on scheduled payments of principal or interest. In most cases, debt is classified as nonperforming when loan payments have not been made for a period of 90 days. While 90 days of nonpayment is the standard period of time for debt to be categorized as nonperforming, the amount of elapsed time may be shorter or longer depending on the terms and conditions set forth in each loan.

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