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ARTICLE · 22 MAY 2017

RBI Fast Tracks The Stressed Asset Resolution Process

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On 5 May 2017, a day after the recent Banking Regulation (Amendment) Ordinance, 2017 (Ordinance) received Presidential assent, the Reserve Bank of India issued a circular on...

IndiaInsolvency/Bankruptcy/Re-Structuring
Manisha Shroff
Manisha Shroff
Madhuparna Dasgupta
Madhuparna Dasgupta
Oindrila Bhowmik
Oindrila Bhowmik
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On 5 May 2017, a day after the recent Banking Regulation (Amendment) Ordinance, 2017 (Ordinance) received Presidential assent, the Reserve Bank of India (RBI) issued a circular on 'Timelines for Stressed Assets Resolution' (Circular). The Circular amends the existing "Framework for Revitalising Distressed Assets in the Economy – Guidelines on JLF and CAP" dated 26 February 2014 (JLF Framework) and mandates members of a joint lenders forum (JLF) to follow strict timelines in implementing the corrective action plan (CAP) or suffer penal consequences for non-compliance.

This Circular has been issued against the backdrop of the Ordinance which empowered the RBI to, inter alia, direct banks to initiate insolvency proceedings and issue directions for resolving stressed assets. The Circular constitutes the first set of directions issued by the RBI under the Ordinance, and clearly demonstrates that the RBI is exercising its powers under the Ordinance to achieve successful

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