Rules of recovery

Settlement framework provides another option

Some bank unions are opposing the “Framework for Compromise Settlements and Technical Write-offs”, announced by the Reserve Bank of India (RBI) on June 8, and have termed it a detrimental step that can compromise the integrity of the banking system. According to the framework, regulated entities are expected to put in place board-approved policies for making compromise settlements with debtors as well as for technical write-offs. Compromise settlement in this context would mean a negotiated arrangement with the borrower to settle the claims of the lender in full, which may lead to a sacrifice of some amount due from the