RBI Issues Revised Norms to Deal with Stressed Assets

  • On 7th June, 2019, RBI issued the Prudential Framework for Resolution of Stressed Assets.
  • This was issued following the quashing of its revised framework for resolution of stressed assets by the Supreme Court in April, 2019.

Highlights

  • Gives lenders a breather from the one-day default rule whereby they had to draw up an resolution plan (RP) for implementation within 180 days of the first default.
  • Gives lenders (scheduled commercial banks, all-India financial institutions and small finance banks) 30 days to review the borrower account on default.
  • Lenders may also choose to initiate legal proceedings for insolvency or recovery.
  • It is applicable to small finance ....
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