Contact Your Financial Adviser Money Making MC
8
September 2017
 |
RBI (The Total Investment & Insurance Solutions)
The
Reserve Bank of India (RBI) has identified the second batch of large accounts
which have defaulted in repayment of loans and has advised banks to resolve
them, a senior official said on Thursday.
The
information was revealed by RBI Deputy Governor Viral Acharya, while delivering
the 8th R.K. Talwar Memorial Lecture here.
The
development assumes significance as the RBI in June had come out with a list of
12 large accounts which totaled to about 25 per cent of the current
grossnon-performing assets (NPAs) of the banking system for reference under the
IBC (Insolvency and Bankruptcy Code).
"The
Reserve Bank has now advised banks to resolve some of the other accounts by
December 2017; if banks fail to put in place a viable resolution plan within
the timelines, these cases also will be referred for resolution under the
IBC," Acharya said. The Total
Investment & Insurance Solutions
"The
Reserve Bank has also advised banks to make higher provisions for these
accounts to be referred under the IBC. This is intended to improve bank
provision coverage ratios and to ensure that banks are fully protected against
likely losses in the resolution process." The Total Investment & Insurance Solutions
Acharya
said that going forward, the RBI hopes that banks utilise the IBC extensively
and file for insolvency proceedings on "their own without waiting for
regulatory directions". The
Total Investment & Insurance Solutions
"Ideally,
in line with international best practice, out-of-court restructuring may be the
right medicine at 'pre-default' stage, as soon as the first signs of incipient
stress are evident or when covenants in bank loans are tripped by the
borrowers," he said. The Total
Investment & Insurance Solutions
On the
framework side, once a default happens, the IBC allows for filing for
insolvency proceedings, time-bound restructuring, and failing that,
liquidation.
The
promulgation of the Banking Regulation (Amendment) Ordinance, 2017, and the
subsequent actions taken there under, have made the IBC "a lynchpin"
of the new resolution framework.The
Total Investment & Insurance Solutions
No comments:
Post a Comment