Tuesday, August 14, 2012

RBI panel recommends tighter loan recast norms

The Reserve Bank of India (RBI) working group has recommended an increase in provisioning and
also doing away with regulatory concession towards classification of such loans in two years. It has suggested that banks must provide for 5% against restructured loans that are classified as standard, instead of the current 2%. Promoters must make good 15% of the fall in fair value, or 2% of the restructured amount, whichever is higher.

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