1. After nod from Modi government, RBI said to resolve India’s 60 largest bad loan cases in nine months

After nod from Modi government, RBI said to resolve India’s 60 largest bad loan cases in nine months

Reserve Bank of India, the nation’s banking regulator, wants to resolve the country’s 60 largest delinquent-loan cases in nine months, a person familiar with the matter said.

By: | Published: May 5, 2017 3:08 PM
A representative for the RBI was not immediately available for comment. (Reuters)

Reserve Bank of India, the nation’s banking regulator, wants to resolve the country’s 60 largest delinquent-loan cases in nine months, a person familiar with the matter said. The central bank plans to set up a secretariat to oversee the resolution process for the biggest defaults by loan amount, the person said, asking not to be named as the information isn’t public. The move comes after the South Asian nation’s cabinet approved plans to amend the country’s Banking Regulation Act to give more powers to the RBI to govern lenders and address bad loan issues.

A representative for the RBI was not immediately available for comment.

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Ridding bank balance sheets of stressed assets is key to reviving credit growth and furthering Prime Minister Narendra Modi’s goal of creating more jobs in the $2 trillion economy. Various schemes proposed by RBI to resolve the problem have been unsuccessful, with lenders reluctant to write down assets sufficiently and company owners unwilling to negotiate repayment plans.

Stressed assets — bad loans, restructured debt and advances to companies that can’t meet servicing requirements — have risen to about 17 percent of total loans, the highest level among major economies, data compiled by the government shows. The RBI will be announcing the framework for resolving the bad loans in May, the person said.

  1. C
    Conscience
    May 5, 2017 at 11:48 pm
    What do you mean by "resolve"? Unless you get the money back, it won't help the economy. And then, there are the genuine defaulters too. Unless the economy is improved, they can't pay!
    Reply

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