RBI reiterates its stand on Stressed Assets as per Revised Framework on Resolution of Stressed Assets dated 12.02.2018
According to the press release issued by the RBI, there have been some media reports about the stance of the Reserve Bank of India with regard to the Revised Framework on Resolution of Stressed Assets issued on February 12, 2018.
The Bank declined to comment on that as the matter is sub judice and the Hon’ble Supreme Court has reserved its orders on the matter.
all aspects of the Framework as has been consistently articulated in its communications, including the clarification given during the post-monetary policy press conference on February 07, 2019.
The revised framework requires banks/Financial institutions for early identification and reporting of stress in loan accounts as special mention accounts into different categories starting from even one day default as under:
|Categories||Basis for classification – Principal or interest payment or any other amount wholly or partly overdue between|
Further, the revised framework calls for immediate implementation of Resolution Plan as soon as there is a default in the borrower entity’s account with any lender.
The said Revised Framework for Resolution of Stressed Assets was challenged by the power companies before the Allahabad High Court who declined to grant any interim relief. The matter traveled to the Supreme Court, which has ordered a status quo on the implementation of the Notification/circular dated 12.02.2018