Contact Your Financial Adviser Money Making MC
14
February 2018
 |
RBI
(The Total Investment & Insurance Solutions)
The
Reserve Bank of India (RBI) has brought out a revised framework for speedy
resolution of non-performing assets (NPAs), or bad loans, by harmonising
existing guidelines with the norms specified in the Insolvency and Bankruptcy
Code (IBC), 2016. The Total Investment & Insurance
Solutions
In
a notification issued late on Monday, the RBI said the new guidelines have
specified a framework for early identification and reporting of banks' stressed
assets. The Total Investment & Insurance
Solutions
"In
view of the enactment of the Insolvency and Bankruptcy Code (IBC), 2016, it has
been decided to substitute the existing guidelines with a harmonised and
simplified generic framework for resolution of stressed assets," the RBI
notification said. The Total Investment & Insurance
Solutions
As
part of the revised framework, banks will be required to identify initial
stress in loan accounts, immediately on default, by classifying stressed assets
as special mention accounts (SMA) depending upon the period of default.
The
central bank said that all lenders will be required to put in place
Board-approved policies for resolution of stressed assets, including timelines
for resolution. The Total Investment & Insurance
Solutions
"As
soon as there is a default in the borrower entity's account with any lender,
all lenders - singly or jointly - shall initiate steps to cure the default,"
the notification said. The Total Investment
& Insurance Solutions
On
the implementation of the resolution plan, the central bank said: "The
resolution plan (RP) may involve any actions/plans/reorganisation including,
but not limited to, regularisation of the account by payment of all over dues
by the borrower entity, sale of the exposures to other entities/investors,
change in ownership, or restructuring." The Total Investment & Insurance Solutions
The
revised guidelines have also laid down the timelines for resolution of stressed
assets. The Total Investment & Insurance
Solutions
If
a resolution plan in respect of large accounts is not implemented as per the
timelines specified, lenders will be required to file insolvency applications,
singly or jointly, under the IBC within 15 days from the expiry of the
specified timeline.
Besides,
all lenders will be required to submit a Central Repository of Information on
Large Credits (CRILC) on all borrower entities in default with aggregate
exposure of Rs 5 crore and above.
The
CRILC-Main Report is to be submitted on a monthly basis effective April 1,
2018. The Total Investment & Insurance
Solutions
"In
addition, the lenders shall report to CRILC all borrower entities in default,
on a weekly basis, at the close of business on every Friday, or the preceding
working day if Friday happens to be a holiday," the notification said.
The
first such weekly report shall be submitted for the week ending February 23.
In
this connection, the RBI has also decided to do away with the Joint Lenders'
Forum (JLF) as an institutional mechanism for resolution of stressed accounts.
The
notification said all accounts, including those where any of the schemes have
been invoked but not yet implemented, will be governed by the revised
framework.The Total Investment & Insurance Solutions
No comments:
Post a Comment