RBI sets tough guidelines for banks on NPA

The government empowered RBI to ask banks to initiate insolvency proceedings to recover bad loans, amounting to over 6 lakh crore rupees in case of state-owned lenders alone, and promised more measures to resolve the NPA.

Acting quickly, the RBI made substantial changes in the norms for dealing with stressed loans and warned banks they will be penalised for missing NPA resolution timelines.

Within hours of the notification on ordinance amending the Banking Resolution Act 1949, the RBI, through a notification, eased the decision making process in the Joint Lenders’ Forum (JLF) and Corrective Action Plan (CAP) under the ‘Framework for Revitalising Distressed Assets in the Economy’.


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