RBI releases paper on stressed assets
Q. RBI has released a paper on stressed assets known as ______________.- Published on 14 Jun 16a. Scheme for Sustainable Structuring of Stressed Assets
b. Scheme for Sustainable Structure of Distressed Assets
c. Scheme for Sustaining Structure of Stressed Assets
d. None of the above
ANSWER: Scheme for Sustainable Structuring of Stressed Assets
RBI has released a paper on stressed assets called Scheme for Sustainable Structuring of Stressed Assets. The aim of this paper is strengthening the ability of lenders to deal with stressed assets and place real assets back back on track by providing avenues for reworking financial structure of entities facing genuine difficulties.
- RBI will facilitate the resolution of large accounts which meet specific criteria. Accounts facing severe financial difficulties may be put for restructuring or write down or larger provision can be allowed as well.
- Paper describes resolution plans to be implemented for debt servicing.
- Overseeing Committee will also be formed by the Indian Banks Association in participation with the RBI for choosing stressed assets cases.
- Paper also mentions certain guidelines for choosing accounts falling under it.
- Accounts that have commenced commercial operations and projects in which institutional investors will have exposure of more than INR 500 crore are concerned.
- Amount will include any accrued sustainable debt and paper goes on to define sustainable debt when Joint Leaders Forum or consortium of financial institutions believe existing loan can be serviced or retained at the existing level.
