Mumbai: Reserve Bank of India Deputy Governor N.S. Vishwanathan on Tuesday advised lenders to ensure timely resolution of stressed assets under the new framework to extract the maximum value and asked them for the deal only with “genuine” cases. Addressing the annual industry event Fibac, he also said that the central bank will be coming out with the final guidelines for private and foreign bankers’ compensation soon. Vishwanathan said the RBI’s revised framework on resolution of stressed assets introduced on June 7 is “less intrusive” as it gives banks the leeway to draft their own resolution plans for a particular case.
“Timely resolution is very important. I’d request you to ensure that the resolutions are done in time, not just for the regulatory requirement but also because it will result in better valuation going forward.
“We’ve given a lot of freedom to banks to determine various contours. We are making less intrusive regulations and hope that banks will use this to deal with genuine stress in their balance sheets to address the problem,” he said.
The Reserve Bank of India issued the new NPA recognition and resolution guidelines on June 7 after the Supreme Court had, in April, declared the earlier one issued on February 12, 2018 as ultra vires. (IANS)