Rating agencies to assess viability, recommend haircuts in NPA cases

RBI had outlined an action plan including role for rating agencies in resolution of stressed loans

The Reserve Bank of India (RBI) is expected to rope in rating agencies to assess the viability of debt, crystallise sustainable debt and recommend haircuts lenders need to take in restructuring packages for stressed assets.

Officials at rating agencies said while the RBI was yet to engage them in formal discussions, the broad contours of their assignment are expected to be making independent assessment of recovery prospects, and estimating haircuts for restructuring cases.

A senior executive with the Indian subsidiary of a global rating agency said while the central bank had held preliminary discussions with the rating agencies, it was still early