RBI’s new debt recast norms credit positive for banks

Q.  RBI’s new debt recast norms are credit positive for banks and will reduce gross NPA by how many basis points following one year?
- Published on 15 Jun 16

a. 30-100
b. 40-100
c. 50-100
d. 60-100

ANSWER: 30-100
 
RBI’s new debt recast norms are credit positive for banks and will help in reducing gross NPO levels by 30-100 basis points after a year.
  • Implementation of the guidelines will bridge the gap between actual expected losses and provisioning cover
  • New norms will also help in reducing reported gross NPA levels by 30-100 basis points from current level of 7.7 percent in March 2016
  • RBI issued guidelines on Scheme for Sustainable Structuring of Stressed Assets
  • Scheme allows the bifurcation of stressed borrow debt into sustainable and unsustainable portions

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