RBI cracks whip on banks not game for asset recast

Central bank modifies NPA resolution norms; to penalise banks for delays

On a day when the government vested more powers in the Reserve Bank of India (RBI) in the war against bad debt, the central bank imposed a corrective action plan (CAP) on a wide range of restructurings exercised by banks.

Such a CAP was till now applicable for only the Joint Lenders’ Forum (JLF) mechanism. It is enforced to preserve the economic value of stressed assets. A specified timeline is framed by banks, with disincentives in the form of asset classification and accelerated provisioning where lenders fail to adhere to the JLF Framework. 

Now, the CAP will be applicable for