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Irdai allows insurers to be part of JLF

However, except large insurers like LIC, other insurers might not be active members in the JLF

M Saraswathy  |  Mumbai 

HDFC Ergo buys L&T Insurance for Rs 551 crore

The Insurance Regulatory and Development Authority of India (Irdai) has allowed to be part of the Joint Lenders’ Forum (JLF), formed under Reserve Bank of India (RBI) guidelines for loan accounts that could turn non-performing assets (NPAs). 

“Through this mechanism, may take need-based exposure with the prior approval of the insurer's board which may be in excess of exposures permitted under extant Investment Regulations,” said the circular that has been sent to insurers.

However, officials said that except large such as the Life Insurance Corporation of India (LIC), other might not be an active member in the JLF. RBI had framed new rules to enable commercial banks to form JLFs to detect stress early and provide support to troubled companies.

Banks had been told that as soon as an account is reported by any of the lenders to the Central Repository of Information on Large Credits as ‘special mention account 2’, they should mandatorily form a if the aggregate exposure of lenders in that account is Rs 100 crore and above. 

Now that has allowed to also be a part of this process, it is expected that they would also play a big role in reducing the stressed accounts. The can explore various options to resolve the stress in the account. The intention is not to encourage a particular resolution option — restructuring or recovery — but to arrive at an early solution to preserve the economic value of the underlying assets as well as the lenders’ loans.

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Irdai allows insurers to be part of JLF

However, except large insurers like LIC, other insurers might not be active members in the JLF

However, except large insurers like LIC, other insurers might not be active members in the JLF
The Insurance Regulatory and Development Authority of India (Irdai) has allowed to be part of the Joint Lenders’ Forum (JLF), formed under Reserve Bank of India (RBI) guidelines for loan accounts that could turn non-performing assets (NPAs). 

“Through this mechanism, may take need-based exposure with the prior approval of the insurer's board which may be in excess of exposures permitted under extant Investment Regulations,” said the circular that has been sent to insurers.

However, officials said that except large such as the Life Insurance Corporation of India (LIC), other might not be an active member in the JLF. RBI had framed new rules to enable commercial banks to form JLFs to detect stress early and provide support to troubled companies.

Banks had been told that as soon as an account is reported by any of the lenders to the Central Repository of Information on Large Credits as ‘special mention account 2’, they should mandatorily form a if the aggregate exposure of lenders in that account is Rs 100 crore and above. 

Now that has allowed to also be a part of this process, it is expected that they would also play a big role in reducing the stressed accounts. The can explore various options to resolve the stress in the account. The intention is not to encourage a particular resolution option — restructuring or recovery — but to arrive at an early solution to preserve the economic value of the underlying assets as well as the lenders’ loans.
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Business Standard
177 22

Irdai allows insurers to be part of JLF

However, except large insurers like LIC, other insurers might not be active members in the JLF

The Insurance Regulatory and Development Authority of India (Irdai) has allowed to be part of the Joint Lenders’ Forum (JLF), formed under Reserve Bank of India (RBI) guidelines for loan accounts that could turn non-performing assets (NPAs). 

“Through this mechanism, may take need-based exposure with the prior approval of the insurer's board which may be in excess of exposures permitted under extant Investment Regulations,” said the circular that has been sent to insurers.

However, officials said that except large such as the Life Insurance Corporation of India (LIC), other might not be an active member in the JLF. RBI had framed new rules to enable commercial banks to form JLFs to detect stress early and provide support to troubled companies.

Banks had been told that as soon as an account is reported by any of the lenders to the Central Repository of Information on Large Credits as ‘special mention account 2’, they should mandatorily form a if the aggregate exposure of lenders in that account is Rs 100 crore and above. 

Now that has allowed to also be a part of this process, it is expected that they would also play a big role in reducing the stressed accounts. The can explore various options to resolve the stress in the account. The intention is not to encourage a particular resolution option — restructuring or recovery — but to arrive at an early solution to preserve the economic value of the underlying assets as well as the lenders’ loans.

image
Business Standard
177 22