RBI Deputy Governor SS Mundra said there is a need to further strengthen existing stressed asset resolution mechanisms, such as oversight committees and joint lenders forums (JLF).

“I think we need to provide more strength to the processes, and that is where there are discussions going on (like) whether the institution of oversight committee can be further enlarged or strengthened. Similarly, the whole working of the JLF mechanism,” he told newspersons here.

Mundra was replying to a specific question on the perceived inefficacy of the existing asset resolution mechanisms in dealing with the non-performing assets (NPA) problem. Refusing to give a timeline by when the RBI will come out with the modifications, Mundra said there have been discussions on asset resolution among the central bank, the government and other stakeholders.

Elaborating on the JLF mechanism, he pointed out that a few things are crucial, such as: all bankers coming together and deciding on the future course of action; transparency in valuation; and the need for adequate provisions if they decide to take a haircut. On the lack of progress in strategic debt restructuring (SDR) cases where banks have not been able to find buyers, Mundra said the banks are still hopeful and they still have some time.

Mudra said banks are on course to tiding over the NPA problem by the March-end deadline, with banks meeting quarterly targets.

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