Reserve Bank of India (RBI) issues new NPA guidelines

Mumbai: The Reserve Bank of India (RBI) on Friday issued new guidelines for dealing with non-performing assts (NPA) after the Supreme Court quashed its February 12, 2018, circular, which had mandated the lenders to start resolution even in case of one-day default, leading to huge protests from various quarters, particularly defaulters from the power sector.

The new NPA resolution norms replace all the previous schemes, the central bank said. Under the new norms, defaults are to be recognized within 30 days, says RBI. This means there will bo no starting of resolution process under insolvency within a day of default.

Lenders shall recognise incipient stress in loan accounts, immediately on default, by classifying such assets as special mention accounts (SMA) as per categories where SMA-0 categories will be treated as default case fit for insolvency resolution if they fail to pay the principal or interest due on them within 0-30 days. The SMA-1 defaulters will be taken for Insolvency and Bankruptcy Code (IBC) if they dont pay between 31-60 days. The SMA-3 firms will be treated for National Company Law Tribunal (NCLT) in case of no payment of dues within 61-90 days. (IANS)

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