Rbi May Ease Norms For Asset Transfer

The Reserve Bank of India (RBI) may allow banks and financial institutions to transfer sticky assets to the proposed asset reconstruction company (ARC) more than the 40 per cent cap that was stipulated in the draft guidelines. These guidelines, released in December, capped the amount of assets that could be transferred at 40 per cent of the net worth of the bank or the financial institution.

At a meeting with senior bankers on Monday, the RBI brass indicated that this limit could be relaxed on a case-to-case basis. This is of enormous significance as banks and institutions can transfer a higher amount of sticky assets to the ARC now.

On December 31, 2002, ICICI Bank