New Delhi: Banks may be authorised to initiate insolvency resolution process in respect of loan default under the Bankruptcy Code with the promulgation of the ordinance on Friday amending the Banking Regulation Act.

The ordinance, signed by President Pranab Mukherjee on Friday, has a provision under which the central government may authorise the Reserve Bank of India to issue directions to any banking company to initiate insolvency in respect of a default under the provision of the Insolvency and Bankruptcy Code. 2016.