Saturday, October 15, 2016

Released S4A norms help corporate

Scheme for Sustainable Structuring of Stressed Assets, or S4A, the scheme, launched in June, allows banks to convert up to half the loans of stressed corporates into equity or equity-like instruments. A bank will have to decide on the 'sustainable' portion of the debt. The rest can be converted into equity. The RBI has now allowed the sustainable portion of the debt to be treated as a standard asset in all cases, subject to certain conditions. While guidelines will be issued by this month-end, the leeway will offer relief to banks in terms of provisioning and ease up capital to an extent.


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