The Reserve Bank of India has asked banks to put in place a robust mechanism for early detection of signs of distress in loan accounts.
Further, it wants them to adopt measures, including prompt restructuring in the case of all viable accounts wherever required, with a view to preserving the economic value of such accounts.
Banks have also been asked to have proper system generated segment–wise data on their non-performing asset accounts, write-offs, compromise settlements, recovery and restructured accounts.
The RBI, in its Annual Monetary Policy for 2012-13, has directed banks to take these measures to improve the banks’ ability to manage their non-performing assets and restructured accounts in an effective manner.
During annual financial inspection of banks, it has observed that the restructuring facilities are not readily extended to small accounts.