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ARTICLE · 06 JULY 2023

RBI Harmonizes Guidelines On Compromise Settlement And Technical Write-Off

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The Framework is applicable to Local Area Banks and Co-operative Banks, thus covering a wider set of creditors than the Prudential Framework.

IndiaAccounting and Audit
Rolwine Alva
Rolwine Alva
Riya Agicha
Riya Agicha
Prashamsha Tulachan
Prashamsha Tulachan
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The Reserve Bank of India (RBI) recently introduced a circular no. RBI/2023-24/40 DOR.STR.REC.20/21.04.048/2023-24 dated 8 June 2023 on the Framework for Compromise Settlements and Technical Write-offs (Framework). The Framework is a comprehensive guideline on compromise settlements and technical write-offs undertaken by: (i) Commercial Banks (including Small Finance Banks, Local Areas Banks and Regional Rural Banks); (ii) Primary (Urban) Co-operative Banks/State Co-Operative Banks/ Central Co-operative Banks; (iii) All-India Financial Institutions; and (iv) Non-Banking Financial Companies (including Housing Finance Companies) (together referred to as Regulated Entities/ REs).

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