RBI Refuses To Dilute Feb. 12 Circular On Stressed Assets
RBI Governor Shaktikanta Das last month said there would be no changes in the Feb. 12, 2018 circular.
The Reserve Bank of India maintained that there is no dilution in its stand with regard to the Feb.12, 2018 circular on stressed assets recognition and resolution.
"It is reiterated that the RBI maintains its stand on 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 Feb. 7, 2019," the central bank said in a statement.
The statement comes amid reports that the RBI seems to be toeing the government line and considering relaxation of some of the aspects of the Revised Framework on Resolution of Stressed Assets issued on Feb. 12, 2018.
As the matter is sub-judice and the Supreme Court has reserved its orders on the matter, the RBI will not comment on the specific details, it said.
RBI Governor Shaktikanta Das last month had said there would be no changes in the circular.
The circular directed lenders to refer any loan account over Rs 2,000 crore under the Insolvency and Bankruptcy Code if it is not resolved within 180 days of default.
It also underscored IBC’s status as the cornerstone of the bad loan resolution framework, scrapping all previous mechanisms. The circular imposed a one-day default rule. Banks have to treat a company as a defaulter even if it misses repayment schedule by a day.
However, this harsh norms have been criticised in various quarters, including by a parliamentary committee.