sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Latest Expert Exchange
« Latest Circulars »
  RBI-Setting up of IFSC Banking Units (IBUs) – Permissible activities
 RBI-Basel III Framework on Liquidity Standards – Net Stable Funding Ratio (NSFR) – Final Guidelines
 RBI imposes penalty on The United Co-operative Bank Ltd., Bagnan Station Road(North), PO- Bagnan, Dist- Howrah, West Bengal
 Auction for Sale (Re-issue) of Government Stock (GS) May 14, 2018
 Auction of Government of India Dated Securities May 14, 2018
 RBI declines to share copies of inspection reports
  RBI - Auction of State Government Securities
 Revised guidelines on lending to Priority Sector for Primary (Urban) Co-operative Banks (UCBs)
 RBI to conduct 7-day Variable Rate Reverse Repo Auction under LAF on May 10, 2018
  Monitoring of foreign investment limits in listed Indian companies
 Auction for Sale (Re-issue) of Government Stock (GS) May 7, 2018

RBI introduces a Scheme for Sustainable Structuring of Stressed Assets
June, 14th 2016

In order to further strengthen the lenders’ ability to deal with stressed assets and to put real assets back on track by providing an avenue for reworking the financial structure of entities facing genuine difficulties, the Reserve Bank of India has today issued guidelines on a ‘Scheme for Sustainable Structuring of Stressed Assets’.

Resolution of large borrowal accounts which are facing severe financial difficulties may, inter-alia, require co-ordinated deep financial restructuring which often involves a substantial write-down of debt and/or making large provisions. Often such high write-downs act as a disincentive to lenders to effect a sustainable change in the liability structure of borrows facing stress. Banks have also represented for a regulatory framework which would facilitate lenders taking up the exercise of reworking of the liability structure of companies to which they have significant exposures, in the context of asset quality stress currently faced by them.

Accordingly, the Reserve Bank, after due consultation with lenders, has formulated the ‘Scheme for Sustainable Structuring of Stressed Assets’ (S4A) as an optional framework for the resolution of large stressed accounts. The S4A envisages determination of the sustainable debt level for a stressed borrower, and bifurcation of the outstanding debt into sustainable debt and equity/quasi-equity instruments which are expected to provide upside to the lenders when the borrower turns around.

In order to make sure that that the entire exercise is carried out in a transparent and prudent manner, S4A envisages that the resolution plan will be prepared by credible professional agencies, while an Overseeing Committee, set up by the Indian Banks Association, in consultation with the RBI, comprising of eminent experts will independently review the processes involved in preparation of the resolution plan, under the S4A, for reasonableness and adherence to the provisions of these guidelines, and opine on it.

Alpana Killawala
Principal Adviser

Press Release : 2015-2016/2893

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Wholesale Silver Jewelry

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions