In wake of the ordinance promulgated on Friday empowering the Reserve Bank of India (RBI) to tackle bad loans, the central bank revised the guidelines in this regard and warned banks of monetary penalty if they fail to meet the timelines.
“The Framework aims at early identification of stressed assets and timely implementation of a corrective action plan (CAP) to preserve the economic value of stressed assets.
In order to ensure that the CAP is finalised and formulated in an expeditious manner, the Framework specifies various timelines within which lenders have to decide and implement the CAP,” said an RBI notification. “Any non-adherence to these instructions and timelines specified under the Framework shall attract monetary penalties on the concerned banks under the provisions of the Banking Regulation Act 1949,”
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