ADVERTISEMENT
Indian Lenders Seek Easier Bad Loan Rules From Regulator
Indian banks seek an easing of rules related to bad loan recognition from the newly-appointed RBI Governor Shaktikanta Das
14 Dec 2018, 06:06 AM IST
(Bloomberg) -- India’s state-run banks sought an easing of rules related to bad loan recognition in a meeting with newly-appointed central bank Governor Shaktikanta Das, people familiar with the matter said.
(Bloomberg) -- India’s state-run banks sought an easing of rules related to bad loan recognition in a meeting with newly-appointed central bank Governor Shaktikanta Das, people familiar with the matter said.
- The heads of seven banks also asked for a liquidity boost for the financial system to help non-bank financiers tide over a cash crunch, the people said, asking not to be identified as the discussions are private. An easing of lending curbs on 11 weak state-run lenders was also discussed, they said.
Key Insights
- Regulations have limited banks’ ability to extend credit. The bank chiefs may see an opening for rules to be softened after previous Governor Urjit Patel’s surprise resignation this week following a rift with the government.
- Bankers are hoping Das will be more lenient in implementing regulations on bad-loan recognition and its prompt corrective action framework, helping them boost lending and reducing their need to provision for soured loans.
- A liquidity boost to the financial system and funding lines to non-bank lenders would calm credit markets that have been rattled after shock defaults by Infrastructure Leasing & Financial Services Ltd.
Get More
- Power companies have approached the courts to seek relief from the RBI’s February circular, which tightened norms on debt servicing.
- Das said Wednesday that he also plans to meet with the CEOs of private sector banks to understand their concerns.
- An RBI spokesman didn’t immediately respond to a phone call seeking comments.
--With assistance from Anirban Nag.
To contact the reporter on this story: Saloni Shukla in Mumbai at sshukla72@bloomberg.net
To contact the editors responsible for this story: Arijit Ghosh at aghosh@bloomberg.net, Anto Antony
©2018 Bloomberg L.P.
Get live Stock market updates, Business news, Today’s latest news, Trending stories, and Videos on NDTV Profit.
ADVERTISEMENT