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RBI: Banks should report defaults above Rs 5 crore

On Monday, the RBI abolished half a dozen existing loan-restructuring mechanisms, and instead provided for a strict 180-day timeline for banks to agree on a resolution plan in case of a default.

By: ENS Economic Bureau | Mumbai | Published: February 14, 2018 2:05 am
RBI: ‘Banks should report defaults above Rs 5 crore’ “The first such weekly report shall be submitted for the week ending February 23, 2018,” the RBI said while announcing the revised framework for resolution of stressed assets.

The Reserve Bank of India (RBI) has said banks should report to the Central Repository of Information on Large Credits (CRILC) about all borrower entities in default with aggregate exposure of Rs 5 crore and above on a weekly basis on every Friday.

“The first such weekly report shall be submitted for the week ending February 23, 2018,” the RBI said while announcing the revised framework for resolution of stressed assets.

Further, lenders will have to report credit information, including classification of an account as SMA (special mention account) to CRILC on all borrower entities having aggregate exposure of Rs 5 crore and above with them. “The CRILC-Main Report will now be required to be submitted on a monthly basis effective April 1, 2018,” it said.

On Monday, the RBI abolished half a dozen existing loan-restructuring mechanisms, and instead provided for a strict 180-day timeline for banks to agree on a resolution plan in case of a default or else refer the account for bankruptcy. Under the new rules, insolvency proceedings would have to be initiated in case of a loan of Rs 2,000 crore or more if a resolution plan is not implemented within 180 days of the default. Banks will face penalties in case of failure to comply with the guidelines, the RBI said.

New norms on bad loans wake up call for defaulters: Govt

New Delhi: Financial Services Secretary Rajiv Kumar on Tuesday said the new Reserve Bank of India rules are a “wake up call” for defaulters.

“The government is determined to clean up things in one go and not defer it. It is a more transparent system for resolution,” he said,” he said here.

He also said that the Reserve Bank of India’s decision would not have much impact on provisioning norms for banks. —ENS

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