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The Reserve Bank of India proposes to relax the the asset classification norms under the Scheme for Sustainable Structuring of Stressed Assets (S4A) to make it more effective.
Detailed guidelines in this regard will be issued by the central bank by end-October 2016.
"It is proposed to allow that portion of debt determined to be sustainable to be treated as a standard asset in all cases, subject to certain conditions," the RBI said..
S4A aims to provide an avenue for reworking the financial structure of entities facing genuine difficulties and requiring co-ordinated deep financial restructuring. The scheme provides flexibility in restructuring, which may involve material write-down of debt and/or making large provisions, under a credible framework.
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