RBI/2017-18/131
DBR.No.BP.BC.101/21.04.048/2017-18
February
12, 2018
All Scheduled Commercial Banks
(Excluding Regional Rural Banks (RRB)),
All-India Financial Institutions
(Exim Bank, NABARD, NHB and SIDBI)
Dear Sir/Madam,
Resolution of Stressed Assets –
Revised Framework
1. The Reserve Bank of India has
issued various instructions aimed at resolution of stressed assets in the
economy, including introduction of certain specific schemes at different
points of time. In view of the enactment of the Insolvency and Bankruptcy
Code, 2016 (IBC), it has been decided to substitute the existing guidelines
with a harmonised and simplified generic framework for resolution of
stressed assets. The details of the revised framework are elaborated in the
following paragraphs.
I. Revised Framework
A. Early identification and
reporting of stress
2. Lenders1 shall identify incipient stress in loan accounts,
immediately on default2, by classifying stressed assets as special mention
accounts (SMA) as per the following categories:
SMA
Sub-categories
|
Basis
for classification – Principal or interest payment or any other amount
wholly or partly overdue between
|
SMA-0
|
1-30 days
|
SMA-1
|
31-60 days
|
SMA-2
|
61-90 days
|
3. As provided in terms of
the circular DBS.OSMOS.No.14703/33.01.001/2013-14 dated May 22, 2014 and
subsequent amendments thereto, lenders shall report credit information,
including classification of an account as SMA to Central Repository of
Information on Large Credits (CRILC) on all borrower entities having
aggregate exposure3 of ? 50 million and above with them. The
CRILC-Main Report will now be required to be submitted on a monthly basis
effective April 1, 2018. In addition, the lenders shall report to CRILC,
all borrower entities in default (with aggregate exposure of ? 50 million
and above), on a weekly basis, at the close of business on every Friday, or
the preceding working day if Friday happens to be a holiday. The first such
weekly report shall be submitted for the week ending February 23, 2018.
B. Implementation of Resolution
Plan
4. All lenders must put in place
Board-approved policies for resolution of stressed assets under this framework,
including the timelines for resolution. As soon as there is a default in
the borrower entity’s account with any lender, all lenders - singly or
jointly - shall initiate steps to cure the default. The resolution plan
(RP) may involve any actions / plans / reorganization including, but not
limited to, regularisation of the account by payment of all over dues by
the borrower entity, sale of the exposures to other entities / investors,
change in ownership, or restructuring4. The RP shall be clearly documented by all the lenders
(even if there is no change in any terms and conditions).
C. Implementation Conditions for
RP
5. A RP in respect of borrower
entities to whom the lenders continue to have credit exposure, shall be
deemed to be ‘implemented’ only if the following conditions are met:
a. the borrower entity is no
longer in default with any of the lenders;
b. if the resolution involves
restructuring; then
i.
all
related documentation, including execution of necessary agreements between
lenders and borrower / creation of security charge / perfection of
securities are completed by all lenders; and
ii.
the
new capital structure and/or changes in the terms of conditions of the
existing loans get duly reflected in the books of all the lenders and the
borrower.
6. Additionally, RPs involving
restructuring / change in ownership in respect of ‘large’ accounts (i.e.,
accounts where the aggregate exposure of lenders is ? 1 billion and above),
shall require independent credit evaluation (ICE) of the residual debt5 by credit rating agencies (CRAs) specifically
authorised by the Reserve Bank for this purpose. While accounts with
aggregate exposure of ? 5 billion and above shall require two such ICEs,
others shall require one ICE. Only such RPs which receive a credit opinion
of RP46 or better for the residual debt from one or two
CRAs, as the case may be, shall be considered for implementation. Further,
ICEs shall be subject to the following:
a.
The
CRAs shall be directly engaged by the lenders and the payment of fee for
such assignments shall be made by the lenders.
b.
If
lenders obtain ICE from more than the required number of CRAs, all such ICE
opinions shall be RP4 or better for the RP to be considered for
implementation.
7. The above requirement of ICE
shall be applicable to restructuring of all large accounts implemented from
the date of this circular, even if the restructuring is carried out before
the ‘reference date’ stipulated in paragraph 8 below.
D. Timelines for Large Accounts
to be Referred under IBC
8. In respect of accounts with
aggregate exposure of the lenders at ? 20 billion and above, on or after
March 1, 2018 (‘reference date’), including accounts where resolution may
have been initiated under any of the existing schemes as well as accounts
classified as restructured standard assets which are currently in respective
specified periods (as per the previous guidelines), RP shall be implemented
as per the following timelines:
i.
If in
default as on the reference date, then 180 days from the reference date.
ii.
If in
default after the reference date, then 180 days from the date of first such
default.
9. If a RP in respect of such
large accounts is not implemented as per the timelines specified in
paragraph 8, lenders shall file insolvency application, singly or jointly,
under the Insolvency and Bankruptcy Code 2016 (IBC)7 within 15 days from the expiry of the said
timeline8.
10. In respect of such large
accounts, where a RP involving restructuring/change in ownership is
implemented within the 180-day period, the account should not be in default
at any point of time during the ‘specified period’, failing which the
lenders shall file an insolvency application, singly or jointly, under the
IBC within 15 days from the date of such default.
‘Specified period’ means the
period from the date of implementation of RP up to the date by which at
least 20 percent of the outstanding principal debt as per the RP and
interest capitalisation sanctioned as part of the restructuring, if any, is
repaid.
Provided that the specified
period cannot end before one year from the commencement of the first
payment of interest or principal (whichever is later) on the credit facility
with longest period of moratorium under the terms of RP.
11. Any default in payment after
the expiry of the specified period shall be reckoned as a fresh default for
the purpose of this framework.
12. For other accounts with
aggregate exposure of the lenders below ? 20 billion and, at or above ? 1
billion, the Reserve Bank intends to announce, over a two-year period,
reference dates for implementing the RP to ensure calibrated, time-bound
resolution of all such accounts in default.
13. It is, however, clarified
that the said transition arrangement shall not be available for borrower
entities in respect of which specific instructions have already been issued
by the Reserve Bank to the banks for reference under IBC. Lenders shall
continue to pursue such cases as per the earlier instructions.
E. Prudential Norms
14. The revised prudential norms
applicable to any restructuring, whether under the IBC framework or outside
the IBC, are contained in Annex-19. The provisioning in respect of exposure to borrower
entities against whom insolvency applications are filed under the IBC shall
be as per their asset classification in terms of the Master Circular on
Prudential norms on Income Recognition, Asset Classification and
Provisioning, as amended from time to time.10
F. Supervisory Review
15. Any failure on the part of
lenders in meeting the prescribed timelines or any actions by lenders with
an intent to conceal the actual status of accounts or evergreen the
stressed accounts, will be subjected to stringent supervisory / enforcement
actions as deemed appropriate by the Reserve Bank, including, but not
limited to, higher provisioning on such accounts and monetary penalties11.
G. Disclosures
16. Banks shall make appropriate
disclosures in their financial statements, under ‘Notes on Accounts’,
relating to resolution plans implemented. Detailed guidelines will be
issued separately.
H. Exceptions
17. Restructuring in respect of
projects under implementation involving deferment of date of commencement
of commercial operations (DCCO), shall continue to be covered under the
guidelines contained at paragraph 4.2.15 of the Master Circular
No.DBR.No.BP.BC.2/21.04.048/2015-16 dated July 1, 2015 on ‘Prudential
norms on Income Recognition, Asset Classification and Provisioning
pertaining to Advances’.
I. Withdrawal of extant
instructions
18. The extant instructions on
resolution of stressed assets such as Framework for Revitalising Distressed
Assets, Corporate Debt Restructuring Scheme, Flexible Structuring of
Existing Long Term Project Loans, Strategic Debt Restructuring Scheme
(SDR), Change in Ownership outside SDR, and Scheme for Sustainable
Structuring of Stressed Assets (S4A) stand withdrawn with immediate effect.
Accordingly, the Joint Lenders’ Forum (JLF) as an institutional mechanism
for resolution of stressed accounts also stands discontinued. All accounts,
including such accounts where any of the schemes have been invoked but not
yet implemented, shall be governed by the revised framework.
19. The list of
circulars/directions/guidelines subsumed in this circular and thereby stand
repealed from the date of this circular is given in Annex - 3.
20. The above guidelines are
issued in exercise of powers conferred under Section 35A, 35AA (read with
S.O.1435 (E) dated May 5, 2017 issued by the Government of India) and 35AB
of the Banking Regulation Act, 1949; and, Section 45(L) of the Reserve Bank
of India Act, 1934.
Yours faithfully,
(Saurav Sinha)
Chief General Manager-in-Charge
Annex
– 1
Norms
Applicable to Restructuring
1. Restructuring is an act in
which a lender, for economic or legal reasons relating to the borrower's
financial difficulty12, grants concessions to the borrower. Restructuring
would normally involve modification of terms of the advances / securities,
which would generally include, among others, alteration of repayment period
/ repayable amount / the amount of instalments / rate of interest / roll
over of credit facilities / sanction of additional credit facility /
enhancement of existing credit limits / compromise settlements where time
for payment of settlement amount exceeds three months.
I. Prudential Norms13
A. Asset Classification
2. In case of restructuring, the
accounts classified as 'standard' shall be immediately downgraded as
non-performing assets (NPAs), i.e., ‘sub-standard’ to begin with. The
non-performing assets, upon restructuring, would continue to have the same
asset classification as prior to restructuring. In both cases, the asset
classification shall continue to be governed by the ageing criteria as per
extant asset classification norms.
B. Conditions for Upgrade
3. Standard accounts classified
as NPA and NPA accounts retained in the same category on restructuring by
the lenders may be upgraded only when all the outstanding loan / facilities
in the account demonstrate ‘satisfactory performance’ (i.e., the payments
in respect of borrower entity are not in default at any point of time)
during the ‘specified period’ (as defined in paragraph 10 of the covering
circular)14.
4. For the large accounts (i.e.,
accounts where the aggregate exposure of lenders is ? 1 billion and above)
to qualify for an upgrade, in addition to demonstration of satisfactory
performance, the credit facilities of the borrower shall also be rated as
investment grade15 (BBB- or better) as at the end of the ‘specified
period’ by CRAs accredited by the Reserve Bank for the purpose of bank loan
ratings. While accounts with aggregate exposure of ? 5 billion and above
shall require two ratings, those below ? 5 billion shall require one
rating. If the ratings are obtained from more than the required number of
CRAs, all such ratings shall be investment grade to qualify for an upgrade.
5. In case satisfactory
performance during the specified period is not demonstrated, the account
shall, immediately on such default, be reclassified as per the repayment
schedule that existed before the restructuring16. Any future upgrade for such accounts shall be
contingent on implementation of a fresh RP and demonstration of
satisfactory performance thereafter.
C. Provisioning Norms
6. Accounts restructured under
the revised framework shall attract provisioning as per the asset classification
category as laid out in the Master Circular on Prudential Norms on Income
Recognition, Asset Classification and Provisioning pertaining to Advances
dated July 1, 2015, as amended from time to time. However, the provisions
made in respect of accounts restructured before the date of the circular
under any of the earlier schemes shall continue to be held as per the
requirements specified therein.
D. Additional Finance
7. Any additional finance
approved under the RP (including any resolution plan approved by the
Adjudicating Authority under IBC) may be treated as 'standard asset' during
the specified period under the approved RP, provided the account performs
satisfactorily (as defined in paragraphs 3-5 above) during the specified
period. If the restructured asset fails to perform satisfactorily during
the specified period or does not qualify for upgradation at the end of the
specified period, the additional finance shall be placed in the same asset
classification category as the restructured debt.
E. Income recognition norms
8. Interest income in respect of
restructured accounts classified as 'standard assets' may be recognized on
accrual basis and that in respect of the restructured accounts classified
as 'non-performing assets' shall be recognised on cash basis.
9. In the case of additional
finance in accounts where the pre-restructuring facilities were classified
as NPA, the interest income shall be recognised only on cash basis except
when the restructuring is accompanied by a change in ownership.
F. Conversion of Principal into
Debt / Equity and Unpaid Interest into 'Funded Interest Term Loan' (FITL),
Debt or Equity Instruments
10. The FITL / debt / equity
instruments created by conversion of part of principal / unpaid interest,
as the case may be, will be placed in the same asset classification
category in which the restructured advance has been classified.
11. These instruments shall be
valued as per usual valuation norms and marked to market. Equity
instruments, whether classified as standard or NPA, shall be valued at
market value, if quoted, or else at break-up value (without considering the
revaluation reserve, if any) as ascertained from the company's balance
sheet as on March 31st of the immediate preceding financial year. In case
balance sheet as on March 31st of the immediate preceding financial year is
not available, the entire portfolio of equity shares of the company held by
the bank shall be valued at Re.1. Depreciation on these instruments shall
not be offset against the appreciation in any other securities held under
the AFS category.
12. The unrealised income
represented by FITL / Debt or equity instrument can only be recognised in
the profit and loss account as under:
a.
FITL/debt
instruments: only on sale or redemption, as the case may be;
b.
Unquoted
equity/ quoted equity (where classified as NPA): only on sale;
c.
Quoted
equity (where classified as standard): market value of the equity as on the
date of upgradation, not exceeding the amount of unrealised income
converted to such equity. Subsequent changes to value of the equity will be
dealt as per the extant prudential norms on investment portfolio of banks.
G. Change in Ownership
13. In case of change in
ownership of the borrowing entities, credit facilities of the concerned
borrowing entities may be continued/upgraded as ‘standard’ after the change
in ownership is implemented, either under the IBC or under this framework.
If the change in ownership is implemented under this framework, then the
classification as ‘standard, shall be subject to the following conditions:
i.
Banks
shall conduct necessary due diligence in this regard and clearly establish
that the acquirer is not a person disqualified in terms of Section 29A of
the Insolvency and Bankruptcy Code, 2016.
ii.
The
new promoter shall have acquired at least 26 per cent of the paid up equity
capital of the borrower entity and shall be the single largest shareholder
of the borrower entity.
iii.
The
new promoter shall be in ‘control’ of the borrower entity as per the
definition of ‘control’ in the Companies Act 2013 / regulations issued by
the Securities and Exchange Board of India/any other applicable regulations
/ accounting standards as the case may be.
iv.
The
conditions for implementation of RP as per Section I-C of the covering
circular are complied with.
14. For such accounts to
continue to be classified as standard, all the outstanding loans/credit
facilities of the borrowing entity need to demonstrate satisfactory
performance (as defined above in paragraph 3 above) during the specified
period. If the account fails to perform satisfactorily at any point of time
during the specified period, the credit facilities shall be immediately
downgraded as non-performing assets (NPAs) i.e., ‘sub-standard’. Any future
upgrade for such accounts shall be contingent on implementation of a fresh
RP (either under IBC, wherever mandatory filings are applicable or
initiated voluntarily by the lenders, or outside IBC) and demonstration of
satisfactory performance thereafter.
15. Further, the quantum of
provisions held by the bank against the said account as on the date of
change in ownership of the borrowing entities can be reversed only after
satisfactory performance during the specified period.
II. Principles on classification
of sale and lease back transactions as restructuring
16. A sale and leaseback
transaction of the assets of a borrower or other transactions of similar
nature will be treated as an event of restructuring for the purpose of
asset classification and provisioning in the books of banks with regard to
the residual debt of the seller as well as the debt of the buyer if all the
following conditions are met:
i.
The
seller of the assets is in financial difficulty;
ii.
Significant
portion, i.e. more than 50 per cent, of the revenues of the buyer from the
specific asset is dependent upon the cash flows from the seller;
iii.
25 per
cent or more of the loans availed by the buyer for the purchase of the
specific asset is funded by the lenders who already have a credit exposure
to the seller.
III. Prudential Norms relating
to Refinancing of Exposures to Borrowers in different currency
17. If foreign currency
borrowings/export advances for the purpose of repayment/refinancing of
rupee loans are obtained from:
a.
lenders
who are part of Indian banking system (where permitted); or
b.
with
support (where permitted) from the Indian banking system in the form of
Guarantees/Standby Letters of Credit/Letters of Comfort, etc.,
such events shall be treated as
‘restructuring’ if the borrower concerned is under financial difficulty.
18. Similarly, rupee loans for
repayment/refinancing of foreign currency borrowings/export advances will
also be treated as ‘restructuring’ if such rupee loans are extended to a
borrower who is under financial difficulty.
IV. Regulatory Exemptions
Exemptions from RBI Regulations
19. Acquisition of non-SLR
securities by way of conversion of debt is exempted from the restrictions
and the prudential limit on investment in unlisted non-SLR securities
prescribed by the RBI.
20. Acquisition of shares due to
conversion of debt to equity during a restructuring process will be
exempted from regulatory ceilings/restrictions on Capital Market Exposures,
investment in Para-Banking activities and intra-group exposure. However,
these will require reporting to RBI (reporting to DBS, CO every month along
with the regular DSB Return on Asset Quality) and disclosure by banks in
the Notes to Accounts in Annual Financial Statements. Nonetheless, banks
will have to comply with the provisions of Section 19(2) of the Banking
Regulation Act, 1949.
Exemptions from Regulations of
Securities and Exchange Board of India (SEBI)
21. SEBI has provided
exemptions, under certain conditions, from the requirements of Securities
and Exchange Board of India (SEBI) (Issue of Capital and Disclosure
Requirements) (ICDR) Regulations, 2009 as well as SEBI (Substantial
Acquisition of Shares and Takeovers) (SAST) Regulations, 2011 for
restructurings carried out as per the regulations issued by the Reserve
Bank.
22. With reference to the
requirements contained in sub-regulations 70 (5) (a) and 70 (6) (a) of ICDR
Regulations, 2009, the issue price of the equity shall be the lower of (i)
or (ii) below:
i.
The
average of the weekly high and low of the volume weighted average price of
the related equity shares quoted on the recognised stock exchange during
the twenty six weeks preceding the ‘reference date’ or the average of the
weekly high and low of the volume weighted average prices of the related
equity shares quoted on a recognised stock exchange during the two weeks preceding
the ‘reference date’, whichever is lower; and
ii.
Book
value: Book value per share to be calculated from the audited balance sheet
as on March 31st of the immediate preceding financial year (without
considering 'revaluation reserves', if any) adjusted for cash flows and
financials post the earlier restructuring, if any. The balance sheet shall
not be more than a year old. In case the audited balance sheet as on March
31st of the immediate preceding financial year is not available the total
book value of the borrower company shall be reckoned at Re.1.
23. In the case of conversion of
debt into equities, the ‘reference date’ shall be the date on which the
bank approves the restructuring scheme. In the case of conversion of
convertible securities into equities, the ‘reference date’ shall be the
date on which the bank approves the conversion of the convertible
securities into equities. In case of issuance of fresh shares to the new
promoter, the ‘reference date’ shall be the date of signing of the binding
agreement between the bank and the new promoter.
24. With reference to the
requirements contained in sub-regulations 10 (1) (ia) (a) of the SAST
Regulations, 2001, at the time of selling the equity instruments acquired
by banks (as part of a restructuring exercise) in favour of a new promoter,
the selling price may be a negotiated price. However, the selling price
shall not be lower than the ‘fair value’, which shall be the higher of (i)
and (ii) below:
i.
The
average of the weekly high and low of the volume weighted average price of
the related equity shares quoted on the recognised stock exchange during
the twenty six weeks preceding the ‘reference date’ or the average of the
weekly high and low of the volume weighted average prices of the related
equity shares quoted on a recognised stock exchange during the two weeks
preceding the ‘reference date’, whichever is higher; and
ii.
Book
value: Book value per share to be calculated from the company's latest
audited balance sheet (without considering 'revaluation reserves', if any)
adjusted for cash flows and financials post the earlier restructuring, if
any.
25. In case of sale of equity
held by banks as a result of conversion/invocation of pledge, the
‘reference date’ shall be the date on which the share purchase agreement
between the bank and the new promoter is executed.
V. Non-applicability of these
guidelines
26. The revival and
rehabilitation of MSMEs as defined under ‘The Micro, Small and Medium
Enterprises Development Act, 2006’ shall continue to be guided by the instructions
contained in Circular No. FIDD.MSME & NFS.BC.No.21/ 06.02.31/
2015-16 dated March 17, 2016, as amended from time to time.
27. Restructuring of loans in
the event of a natural calamity shall continue to be as per the directions
contained in the Master Directions FIDD.CO.FSD.BC
No.8/05.10.001/2017-18, as amended from time to time.
VI. Cases of frauds/wilful
defaulters.
28. Borrowers who have committed
frauds/ malfeasance/ wilful default will remain ineligible for
restructuring. However, in cases where the existing promoters are replaced
by new promoters, and the borrower company is totally delinked from such
erstwhile promoters/management, lenders may take a view on restructuring
such accounts based on their viability, without prejudice to the
continuance of criminal action against the erstwhile promoters/management.
Appendix
Non
– Exhaustive Indicative List of Signs of Financial Difficulty
·
Irregularities
in cash credit/overdraft accounts such as inability to maintain stipulated
margin basis or drawings exceeding sanctioned limits, periodic interest
debited remaining unrealised;
·
Failure/anticipated
failure to make timely payment of instalments of principal and interest on
term loans;
·
Delay
in meeting commitments towards payments of installments due, crystallized
liabilities under LC/BGs, etc.
·
Excessive
leverage;
·
Inability
to adhere to financial loan covenants;
·
Failure
to pay statutory liabilities, non- payment of bills to operational
creditors, etc.;
·
Non-submission
or undue delay in submission or submission of incorrect stock statements
and other control statements, delay in publication of financial statements
and adversely qualified financial statements;
·
Steep
decline in production figures, downward trends in sales and fall in
profits, margin erosion etc.;
·
Elongation
of working capital cycle, excessive inventory build-up;
·
Significant
delay in project implementation;
·
Downward
migration of internal/external ratings/rating outlook.
Annex
– 2
ICE
Symbols
|
Definition
|
RP1
|
Debt facilities/instruments
with this symbol are considered to have the highest degree of safety regarding
timely servicing of financial obligations. Such debt
facilities/instruments carry lowest credit risk.
|
RP2
|
Debt facilities/instruments
with this symbol are considered to have high degree of safety regarding
timely servicing of financial obligations. Such debt
facilities/instruments carry very low credit risk.
|
RP3
|
Debt facilities/instruments
with this symbol are considered to have adequate degree of safety
regarding timely servicing of financial obligations. Such debt
facilities/instruments carry low credit risk.
|
RP4
|
Debt facilities/instruments
with this symbol are considered to have moderate degree of safety
regarding timely servicing of financial obligations. Such debt
facilities/instruments carry moderate credit risk.
|
RP5
|
Debt facilities/instruments
with this symbol are considered to have moderate risk of default
regarding timely servicing of financial obligations.
|
RP6
|
Debt facilities/instruments
with this symbol are considered to have high risk of default regarding
timely servicing of financial obligations.
|
RP7
|
Debt facilities/instruments
with this symbol are considered to have very high risk of default
regarding timely servicing of financial obligations.
|
Annex
– 3
List
of circulars repealed
S.No.
|
Circular
number
|
Date
of issue
|
Subject
|
1
|
DBR.BP.BC.No.67/21.04.048/2016-17
|
05-05-2017
|
Timelines for Stressed Assets
Resolution
|
2
|
DBR.No.BP.BC.33/21.04.132/2016-17
|
10-11-2016
|
Scheme for Sustainable
Structuring of Stressed Assets – Revisions
|
3
|
DBR.No.BP.BC.34/21.04.132/2016-17
(Excluding instructions on deferment of DCCO)
|
10-11-2016
|
Schemes for Stressed Assets –
Revisions
|
4
|
DBR.No.BP.BC.103/21.04.132/2015-16
|
13-06-2016
|
Scheme for Sustainable
Structuring of Stressed Assets
|
5
|
DBR.BP.BC.No.82/21.04.132/2015-16
(Excluding Part E on Sale of Financial Assets to SCs/RCs)
|
25-02-2016
|
Review of Prudential
Guidelines - Revitalising Stressed Assets in the Economy
|
6
|
DBR.BP.BC.No.41/21.04.048/2015-16
|
24-09-2015
|
Prudential Norms on Change in
Ownership of Borrowing Entities (Outside Strategic Debt Restructuring
Scheme)
|
7
|
DBR.BP.BC.No.39/21.04.132/2015-16
|
24-09-2015
|
Framework for Revitalising
Distressed Assets in the Economy - Review of the Guidelines on Joint
Lenders' Forum (JLF) and Corrective Action Plan (CAP)
|
8
|
DBR.No.BP.BC.101/21.04.132/2014-15
|
08-06-2015
|
Strategic Debt Restructuring
Scheme
|
9
|
DBR.No.BP.BC.53/21.04.048/2014-15
|
15-12-2014
|
Flexible Structuring of
Existing Long Term Project Loans to Infrastructure and Core Industries
|
10
|
DBOD.No.BP.BC.45/21.04.132/2014-15
|
21-10-2014
|
Framework for Revitalising
Distressed Assets in the Economy – Review of the Guidelines on Joint
Lenders Forum (JLF) and Corrective Action Plan CAP)
|
11
|
DBOD.No.BP.BC.31/21.04.132/2014-15
|
07-08-2014
|
Refinancing of Project Loans
|
12
|
DBOD.No.BP.BC.24/21.04.132/2014-15
|
15-07-2014
|
Flexible Structuring of Long
Term Project Loans to
Infrastructure and Core Industries
|
13
|
DBOD.No.BP.BC.97/21.04.132/2013-14
(Excluding paragraph 8 on ‘Wilful Defaulters and Non-cooperative
Borrowers’ and paragraph 9 on ‘Dissemination of Information’)
|
26.02.2014
|
Framework for Revitalising Distressed
Assets in the Economy – Guidelines on Joint Lenders Forum (JLF) and
Corrective Action Plan
|
14
|
Para 2 of circular
DBOD.BP.BC.No. 98/21.04.132/2013-14
|
26.02.2014
|
Framework for Revitalising
Distressed Assets in the Economy - Refinancing of Project Loans, Sale of
NPA and Other Regulatory Measures
|
15
|
DBOD.No.BP.BC-99/21.04.048/2012-13
(Excluding paragraph 2 on change in DCCO)
|
30.05.2013
|
Review of Prudential
Guidelines on Restructuring of Advances by Banks and Financial
Institutions
|
16
|
DBOD.BP.BC.No.80/21.04.132/2012-13
|
31.01.2013
|
Disclosure Requirements on
Advances Restructured by Banks and Financial Institutions
|
17
|
DBOD.No.BP.BC-63/21.04.048/2012-13
|
26.11.2012
|
Review of Prudential
Guidelines on Restructuring of Advances by Banks and Financial
Institutions
|
18
|
DBOD.BP.BC.No.99/21.04.132/2010-11
|
10.06.2011
|
Prudential Guidelines on
Restructuring of Advances by Banks
|
19
|
DBOD.BP.BC.No.74/21.04.132/2010-11
|
19.01.2011
|
Credit Support to Micro
Finance Institutions
|
20
|
DBOD.BP.No.49/21.04.132/2010-11
|
07.10.2010
|
Prudential Guidelines on
Restructuring of Advances by Banks
|
21
|
DBOD.No.BP.BC.No.124/21.04.132/2008-09
|
17.04.2009
|
Prudential Guidelines on
Restructuring of Advances
|
22
|
DBOD.BP.BC.121/21.04.132/2008-09
|
09.04.2009
|
Prudential guidelines on
Restructuring of Advances
|
23
|
DBOD.BP.BC.76/21.04.132/2008-09
|
03.11.2008
|
Prudential guidelines on
Restructuring of Advances
|
24
|
DBOD.BP.BC.58/21.04.048/2008-09
|
13.10.2008
|
(i) Disbursal of Loans against
Sanctioned Limits (ii) Restructuring of Dues of the Small and Medium
Enterprises (SMEs)
|
25
|
DBOD.BP.BC.37/21.04.132/2008-09
|
27.08.2008
|
Prudential guidelines on
Restructuring of Advances-comprehensive guidelines
|
26
|
DBOD.NO.BP.BC.45/21.0421.04.048/2005-06
|
10.11.2005
|
Revised Guidelines on
Corporate Debt Restructuring(CDR) Mechanism
|
27
|
DBOD No.BP.BC.101/
21.01.002/2001-02
|
09.05.2002
|
Corporate Debt Restructuring
|
28
|
DBOD No.BP.BC.15/
21.04.114/2000-2001
|
23.08.2001
|
Corporate Debt Restructuring
|
1Lenders under these guidelines would generally include
all scheduled commercial banks (excluding RRBs) and All India Financial
Institutions, unless specified otherwise.
2‘Default’ means non-payment of debt when whole or any
part or instalment of the amount of debt has become due and payable and is
not repaid by the debtor or the corporate debtor, as the case may be.
For
revolving facilities like cash credit, default would also mean, without
prejudice to the above, the outstanding balance remaining continuously in
excess of the sanctioned limit or drawing power, whichever is lower, for
more than 30 days.
3Aggregate exposure under the guidelines would include
all fund based and non-fund based exposure with the lenders.
4Restructuring is an act in which a lender, for economic
or legal reasons relating to the borrower's financial difficulty (An
illustrative non-exhaustive list of indicators of financial difficulty are
given in the Appendix to Annex-I), grants concessions to the borrower.
Restructuring would normally involve modification of terms of the advances
/ securities, which may include, among others, alteration of repayment
period / repayable amount / the amount of instalments / rate of interest;
roll over of credit facilities; sanction of additional credit facility;
enhancement of existing credit limits; and, compromise settlements where
time for payment of settlement amount exceeds three months.
5The residual debt of the borrower entity, in this
context, means the aggregate debt (fund based as well as non-fund based)
envisaged to be held by all the lenders as per the proposed RP.
6Annex – 2 provides list of RP symbols that can be
provided by CRAs as ICE and their meanings.
7Applicable in respect of entities notified under IBC.
8The prescribed timelines are the upper limits. Lenders
are free to file insolvency petitions under the IBC against borrowers even
before the expiry of the timelines, or even without attempting a RP outside
IBC.
9During the period when the RP is being finalised and implemented,
the usual asset classification norms would continue to apply. The process
of re-classification of an asset should not stop merely because RP is under
consideration.
10Accounts in respect of which banks have already been
specifically issued instructions to initiate insolvency resolution
proceedings under the IBC, minimum provisions as already advised shall be
maintained.
11This may be in addition to direction to banks to file
insolvency application under the Insolvency and bankruptcy Code 2016.
12 An illustrative (but not exhaustive) list of
indicators of financial difficulty are in Appendix.
13 Applicable to all resolution plans, including
those undertaken under IBC.
14 For accounts under IBC, the specified period shall
be deemed to commence from the date of implementation of the resolution
plan as approved by the Adjudicating Authority.
15 These ratings shall be the normal ratings provided
by the CRAs and not ICEs referred to in paragraph 6 of the covering
circular.
16 For large accounts, this will be in addition to
mandatory IBC filing.
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