The Reserve Bank of India (RBI) has increased the time limit for banks to come up with a corrective action plan (CAP) by the Joint Lenders Forum (JLF) from 30 days to 45 days in case of loans showing incipient stress.  

Similarly, it has allowed the Independent Evaluation Committee (IEC) a time limit of 45 days instead of 30 days for evaluation of the restructuring package and giving their recommendations for restructuring of accounts with aggregate exposure of Rs. 500 crore and above. 

If an escrow maintaining bank under JLF/Corporate Debt Restructuring mechanism does not appropriate proceeds of repayment by the borrower among the lenders as per agreed terms resulting into down gradation of asset classification of the account in books of other lenders, the escrow maintaining bank will be subjected to corresponding accelerated provision instead of normal provision.

Further, such accelerated provision will be applicable for a period of one year from the effective date of provisioning or till rectification of the error, whichever is later.

As per the reviewed guidelines on JLF and CAP, banks will be permitted to report their SMA (special mention account)-2 accounts (where principal or interest payment overdue between 61-90 days) and JLF formations on a weekly basis at the close of business on every Friday.

Crop loans will be exempted from reporting to Central Repository of Information on Large Credits. However, banks will continue to report their other agriculture loans in terms of the above instruction.

 

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