To contain rising bad loans, which is likely to touch Rs 3 trillion mark this fiscal, RBI today proposed a slew of measures, including incentives to banks for tackling an account timely and penalising borrower with higher interest in future for non-cooperation for a resolution.
In a discussion paper on non-performing assets management, the RBI proposed "early formation of a lenders' committee with timelines to agree to a plan for resolution", among other aspects.
Lenders coming together to salvage an account timely and collectively shall be incentivised through "better regulatory treatment of stressed assets", while in cases where a resolution agreement cannot be reached, there shall be accelerated provisioning, the discussion paper said.
It also said borrowers who do not cooperate with banks in preparing the resolution plans should pay a price by suggesting higher interest rates in future loans.
"More expensive future borrowing for borrowers who do not co-operate with lenders in resolution," it suggested.
"The RBI will create a database of directors on boards of companies classified as non-cooperative borrowers for dissemination to lenders," it added.
The discussion paper, which was first announced by RBI Governor Raghuram Rajan last month, is open for public comments till January 1 next year.
Rajan has been very vocal about the rising tide of NPAs. He had said those promoters who fail to run companies properly and don't service their debt have no moral right to continue in the promoters role.
He was backed by the Finance Minister P Chidambaram who had said, "we could not afford to have failing companies and prosperous promoters".
Gross NPAs of banks have crossed 4 per cent as of the September quarter at Rs 2.37 trillion and are projected to cross 4.4 per cent or at Rs 2.9 trillion by the end of the fiscal, according to a report by rating agency Icra.
The banking system has been reporting higher stress due to a variety of reasons, including slowing of economic growth, projects getting stalled due to want of required clearances from the authorities or regulator, and also the elevated interest rates.
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