Sunday, May 7, 2017

Timelines for Stressed Assets Resolution

Corrective Action Plan also includes resolution of Stressed Assets by way of Flexible Structuring of Project Loans, Change in Ownership under Strategic Debt Restructuring, Scheme for Sustainable Structuring of Stressed Assets (S4A), etc.

·        It has now been decided that, henceforth, the decisions agreed upon by a minimum of 60 % of creditors by value and 50 % by number in the JLF would be considered as the basis for deciding the CAP.
·        This will be binding on all lenders, subject to the exit option available in the Framework.
·        Lenders shall ensure that decisions taken at the JLF are implemented by the lenders within the timelines.

It is further clarified that

(i)      the stand of the banks shall be unambiguous and unconditional;
(ii)  any bank which does not support the majority decision may exit subject to substitution within the stipulated time line, failing which it shall abide the decision of the JLF;
(iii)           the bank shall implement the JLF decision without any additional conditions;
(iv)Boards shall empower their executives to implement the JLF decision.

Non-adherence to these instructions and timelines shall attract monetary penalties on the concerned banks.

Based on RBI circular dated 5/5/2017. For any further clarification please refer ……………. Poppy