RBI issues new guidelines on bad loans, replaces one-day default rule

The Reserve Bank of India (RBI) on Friday issued new guidelines on resolving bad loans, replacing a circular that the Supreme Court rejected.

The RBI said that lenders should review accounts within 30 days of default and initiate a resolution plan before the default--revising its earlier 1-day default norm. All lenders must put in place board-approved policies for resolution of stressed assets, the RBI said.

Lenders will have to submit weekly report of instances of default by all borrowers with aggregate exposure of Rs 5 crore and above.

Here are key points of the RBI circular, as reported by Reuters:

• RBI