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RBI vs Bad Loans

  • To resolve the bad loan problem plaguing the banking sector, the Reserve Bank of India (RBI) outlined the further steps.
  • It plans to take, the oversight committee (OC) and its mandate, modifying existing debt recast rules, and engaging rating agencies for timely action.
  • The central bank will reconstitute the OC and expand the panel to include more members.
  • He existing OC, which has two members, was constituted by the Indian Banks' Association.
  • The RBI will also expand the scope of cases to be referred to the OC beyond those under S4A (Scheme for Sustainable Structuring of Stressed Assets) as required.
  • It is also developing a framework for an “objective and consistent” decision-making process for resolution under the Insolvency and Bankruptcy Code, 2016 (IBC).
  • The banking regulator also sought information on the current status of the large stressed assets from the banks.
  • The RBI further said the enhanced empowerment would require coordination with and the cooperation of several stakeholders.

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