After release of prudential framework for resolution of stressed assets, the Reserve Bank of India (RBI) Governor Shaktikanta Das has said that the revised guidelines to deal with stressed assets will sustain improvement in credit culture that have been ushered in by the efforts of the Government and the Reserve Bank so far and will go a long way in promoting a strong and resilient financial system in India.
Das said that the new guidelines provide a system of strong disincentives in the form of additional provisioning for the delay in initiation of resolution or insolvency proceedings. He also added that the new framework makes inter-creditor agreements mandatory and provides for a majority decision to prevail.
After the Supreme Court nullified the Reserve Bank's circular of February 12, 2018, for resolution of stressed assets, the central bank issued a revised 'Prudential Framework for Resolution of Stressed Assets' on Jun 07, 2019.