The central bank has clarified that there is no change in its stance on the February 12, 2018 circular on Revised Framework on Resolution of Stressed Assets.
“There have been some media reports about the stance of the Reserve Bank of India (RBI) with regard to the Revised Framework on Resolution of Stressed Assets issued on February 12, 2018,” the central bank said in a communication issued on Saturday.
“As the matter is sub-judice and the Hon’ble Supreme Court has reserved its orders on the matter, the Reserve Bank will not comment on the specific details,” it added.
“However, it is reiterated that the Reserve Bank maintains its stand on all aspects of the framework as has been consistently articulated in its communications, including the clarification given during the post-monetary policy press conference on February 07, 2019,” the statement added.
During the post-policy press conference in early February, when asked if the RBI was considering any proposal to modify February 12 circular, RBI Governor Shaktikanta Das said, “At the moment, there is no proposal to modify the February 12 circular.” The circular mandates that banks classify a loan as stressed if there was even a day of default.
The circular also says that banks have to refer all loan accounts worth more than ₹2,000 crore to the National Company Law Tribunal (NCLT) if they failed to resolve the issue within 180 days of default. Through the circular, the RBI also withdrew all the previous loan restructuring mechanisms.
