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ARTICLE · 29 SEPTEMBER 2021

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RBI'S Framework For Transfer Of Loan Assets

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The Master Directions owes its genesis to the ‘Draft Framework for Sale of Loan Exposures' which was released by RBI in course of the first COVID-19 induced lockdown in the Country.

IndiaFinance and Banking
Aditya Bhardwaj
Aditya Bhardwaj
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As an anticipated measure for the banking and financial sector, the Reserve Bank of India (RBI) has, towards the close of past week, issued the comprehensive framework for the sale or transfer of loan assets. Taking immediate effect from the date of its issuance, the framework titled 'Master Directions - Reserve Bank of India (Transfer of Loan Exposures) Directions, 2021' issued vide circular DOR.STR.REC.52/21.04.048/2021-22 dated September 24, 2021 (the 'Master Directions') is being seen as a pivotal move by the Regulator towards introducing an efficient secondary market for loans and ensuring proper credit-risk pricing, besides improving transparency in the identification of embryonic stress in the banking system as well as resolution of stressed loan exposures.

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