The Reserve Bank of India (RBI) may impose heavy penalties on banks, and stipulate higher provisioning for stressed loans following a supervisory review of its June 7 circular. And, in a first-of-its-kind move, chief executive officers (CEOs) and senior management of banks could also be held liable for lack of progress.
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RBI indicated that banks can start the resolution of stressed loans less than Rs.1,500 crore without waiting for a formal notification. It also mentioned that the 7 June 2019 circular was only applicable for stressed accounts in excess Rs.2,000 crore. RBI review of 7 June circular notes Inter-creditor Agreement (ICA) (of 13 banks) yet to be signed for exposures amounting to Rs.3,610 crore.
