Updated: August 21, 2019 3:36:34 am
Reserve Bank Deputy Governor NS Vishwanathan on Tuesday asked bankers to speed up the resolution of stressed assets under the new framework to extract the best value as decisions on a number of accounts are stuck in a limbo.
“Timely resolution is very important. I’d request you to ensure that the resolutions are done in time, not just for the regulatory requirement but also because it will result in better valuation going forward,” he said at the Ficci-IBA banking conference. “We’ve given a lot of freedom to banks to determine various contours. We are making less intrusive regulations and hope that banks will use this to deal with genuine stress in their balance sheets to address the problem,” he said. Vishwanathan said the RBI’s revised framework on resolution of stressed assets introduced on June 7 is “less intrusive” as it gives banks the leeway to draft their own resolution plans for a particular case.
The RBI issued the new NPA recognition and resolution guidelines on June 7. The new framework lays focus on better coordination between banks while dealing with a stressed assets by mandating them to sign inter-creditor agreements and decide on a resolution strategy in 30 days, which will have to be implemented in 180 days.
🗞 Subscribe Now: Get Express Premium to access our in-depth reporting, explainers and opinions 🗞️
- The Indian Express website has been rated GREEN for its credibility and trustworthiness by Newsguard, a global service that rates news sources for their journalistic standards.