Reserve Bank proposes comprehensive guidelines for sale of loan exposures

RBI's proposed guidelines for sale of loan exposures deals with various issues like asset classification of the loan to be transferred, nature of entity purchasing loan and mode of transfer of loans.

The Reserve Bank on Monday proposed a comprehensive framework for sale of loan exposures, which could be standard, sub-standard or non-performing assets (NPAs), as part of the overall exercise to deepen the market for lending.

Loan sales may be resorted to by lenders for any reasons ranging from strategic sales to rebalance their exposures or as a means to achieve resolution of stressed assets by extinguishing the exposures.

Presently, the guidelines for sale of loan exposures, both standard as well as stressed exposures, are spread across various circulars of the RBI.

"A dynamic secondary market for bank loans will also ensure proper discovery