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RBI maintains no dilution on Feb 12 circular on stressed assets

PW Bureau

The central bank will not comment on the specific details since the matter is sub-judice and the Supreme Court has reserved its orders on the matter Mumbai: The Reserve Bank of India on Saturday said that there is no dilution in its stance concerning the February 12 circular on stressed assets recognition and resolution. RBI made this announcement after media reports came up saying that the central bank appears to be pushing the government line and planning relaxation of some of the aspects of the Revised Framework on Resolution of Stressed Assets issued on February 12 last year. "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 7, 2019," the central bank said in a statement.

SC reserves its orders on the matter

The central bank will not comment on the specific details since the matter is sub-judice and the Supreme Court has reserved its orders on the matter, it said.
"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 7, 2019,"
In February, RBI Governor Shaktikanta Das said there would be no changes in the circular. The circular directed banks to refer any loan account more than Rs 2,000 crore under the Insolvency and Bankruptcy Code (IBC) if there is no resolution within 180 days of default. Scrapping all past mechanisms, it also underlined IBC’s status as the basis of the bad loan resolution framework. The Feb 12 circular imposed a one-day default rule. Even if a company misses repayment schedule by a day, lenders have to treat it as a defaulter. However, these harsh norms have been criticised in various quarters, including by a parliamentary committee.