The Union government has notified the Banking Regulation (Amendment) Ordinance, 2017 to give the Reserve Bank of India (RBI) more powers to tackle bad loans clogging the banking system. The ordinance comes into force immediately and enables RBI to direct banks to initiate bankruptcy proceedings against defaulting companies under the Insolvency and Bankruptcy Code. The banking regulator has also been empowered to decide how to deal with toxic assets and instruct banks to act accordingly. RBI will also set up multiple oversight committees to direct banks and joint-lending forums to deal with stressed assets. The new framework may also allow state-owned banks to conduct open auctions of non-performing assets, wherein cash-rich public sector companies will be encouraged to buy such assets in their respective sectors. It contains a set of fresh guidelines for the public auction of assets by state-owned banks for the steel and power sectors, which account for the majority of the toxic assets.