more-inFollowing the executive order by the government to empower the Reserve Bank of India (RBI) for the resolution of stressed assets, the central bank is expected to announce detailed guidelines for banks. RBI will give banks specific time-frames within which they have to either decide the borrower is bankrupt or restructure the debt while taking a haircut, bankers said. “Empowering the RBI with an explicit mandate should reorient various stakeholders for effective NPA resolution. However, the process will make it explicit that such a decision has the central bank’s and the government’s backing. The government has amended the Banking Regulation Act, Section 35 A, to tackle the bad loan problem that is choking bank credit.

Source: The Hindu May 05, 2017 15:45 UTC