RBI issues new circular on resolution of stressed assets
The Reserve Bank on Friday issued a revised framework for resolution of stressed assets by banks after the Supreme Court in April struck down the apex bank's earlier circular which mandated that the resolution process begin immediately on the day after default of loans worth over Rs 2,000 crore.
 
According to the new circular, the lenders can commence resolution process for a stressed asset within 30 days of default.
 
"All lenders must put in place Board-approved policies for resolution of stressed assets, including the timelines for resolution," the circular read.
 
"Since default with any lender is a lagging indicator of financial stress faced by the borrower, it is expected that the lenders initiate the process of implementing a resolution plan (RP) even before a default."
 
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Comments
RAMESH VORA
7 years ago
Irrespective of legality of transfer of funds to DHFL and various entities, end use of funds is important. Any misuse or manipulation of funds by these various companies must be deeply scrutinized and it has to be recovered immediately.
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