February 12, 2018

RBI issued the revised framework on resolution of stressed assets and the framework is applicable to all scheduled commercial banks, excluding regional rural banks, and certain all-India financial institutions. In view of the enactment of the Insolvency and Bankruptcy Code, 2016 (IBC), it has been decided to substitute the existing guidelines with a harmonized and simplified generic framework for resolution of stressed assets.

The framework states that lenders shall identify incipient stress in loan accounts, immediately on default, by classifying stressed assets as special mention accounts (SMA) as per the stipulated categories. Lenders shall report credit information, including classification of an account as SMA to Central Repository of Information on Large Credits (CRILC) on all borrower entities having aggregate exposure of INR 50 million and above with them. The CRILC-Main Report will now be required to be submitted on a monthly basis, effective April 01, 2018. In addition, the lenders shall report to CRILC, all borrower entities in default (with aggregate exposure of INR 50 million and above), on a weekly basis, at the close of business on every Friday, or the preceding working day if Friday happens to be a holiday. The first such weekly report shall be submitted for the week ending February 23, 2018. All lenders must put in place Board-approved policies for resolution of stressed assets under this framework, including the timelines for resolution.

Keywords: Asia Pacific, India, Banking, Reporting, Resolution Framework, Resolution Planning, Stressed Assets, RBI

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