Reserve Bank of India (RBI) Governor Raghuram Rajan has asked bankers to apply the latest loan restructuring norms and not use them as a tool to delay identification of bad loans. The Chief of RBI met the chief executive of several banks in which the director of Central Bureau of Investigation, Chief Vigilance Commissioner, and the Chairman of Bank Board Bureau, Vinod Rai were present.
Earlier, RBI announced a new and revised scheme for debt recast which is called as, Scheme for Sustainable Structuring of Stressed Assets (S4A). The new norms are only applicable for projects that have commenced operations and where bank loans amount to more than Rs.500 crore.
A banker who attended the meeting said, "RBI highlighted the importance of all the new norms and they also asked all banks not to misuse the norms. We have been told about the problems we are facing.
The investigative agencies should understand that as banks we have to take risks and sometimes things can go wrong." As per RBI data, the loans in Indian Banking sector has increased drastically since 2012.
