Recently, the Reserve Bank of India (RBI) introduced the ‘Resolution of Stressed Assets – Revised Framework’, replacing the regime of voluntary restructuring for Indian banks. Since restructuring had become the default go-to option for banks and defaulting borrowers, this move, which puts banks under very stringent disclosure and deadline schedules, has created a significant stir in the market. Under the new framework, the RBI has primarily focussed on NPAs of the borrowers where the total banking loan exposure exceeds Rs 2000 crores. Banks are now required to resolve the defaults in all such accounts (whether through curing non-payment or restructuring) within a period of six months, failing which they have to mandatorily refer the …
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