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Circular on NPAs Issued by RBI, Says 30 Days Gap for NPA Defaults
June 10, 2019
This Friday, central bank RBI issued a circular that carries the details of a new framework for the resolution of non-performing assets (NPAs). One of its key norms is a period of one month given for the recognition of bad loans compared to one day period that was given earlier.
As per the new framework, all the previous norms will be replaced in areas like sustainable structuring of stressed assets (S4A), flexible structuring of existing long-term project loans, etc.
RBI said that the banks should recognize increasing stress in loan accounts as soon as default is identified by classifying these accounts as special mention accounts (SMA).
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