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RBI Tweets Rules for Taking Action Against Non-Compliant Lenders
April 17, 2017
In a bid to deal with the lenders who are not complying with the capital ratio or overshooting the limit of bad loans the Reserve Bank of India recently made some changes to the current rules.
These new rules come under the Prompt Corrective Action framework that was launched in 2002. It was created to allow the RBI to take supervisory action against lenders for breaching the set thresholds, etc.
According to the new ruling, if a bank’s capital-to-risk-assets ratio falls below 7.75 % then the RBI can take regulatory action against them. If it falls below 3.625 %, the bank could also be considered for a merger.
