Since default with any lender is a lagging indicator of

financial stress faced by the borrower, the circular said,

“it is expected that the lenders initiate the process of
implementing an RP even before a default.”
While the defunct circular was applicable only to
Scheduled Commercial Banks (excluding Regional Rural
Banks) and all-India financial institutions, the new
circular is also applicable to small finance banks and
systemically important non-deposit taking non-banking
financial companies (NBFCs) and deposit-taking NBFCs.
In cases where the RP is to be implemented, all lenders
have to enter into an inter-creditor agreement (ICA) for
the resolution of stressed assets during the review
period to provide for ground rules for finalisation and
implementation of the RP in respect of borrowers with
credit facilities from more than one lender.
Under the ICA, any decision agreed to by the lenders
representing 75 per cent of total outstanding credit
facilities by value and 60 per cent by number will be
binding upon all the lenders. In particular, the RPs will
provide for payment which will not be less than the
liquidation value due to the dissenting lenders.
In cases where the aggregate exposure of a borrower to
lenders (scheduled commercial banks, all-India financial
institutions and small finance banks) is ₹2,000 crore
and above, the RP has to be implemented within 180
days from the end of the review period, and the
reference date has been set as June 7, 2019.
In the case of borrowers in the ₹1,500 crore and above
but less than ₹2,000 crore category, January 1, 2020
has been set as the reference date for implementing
the RP. In the less than ₹1,500 crore category, the RBI
will announce the reference date in due course.
Additional provisions
If the implementation of an RP crosses the stipulated
180 days from the end of the review period, the lenders
have to make additional provisions of 20 per cent of the
outstanding loan. If this timeline exceeds 365 days,
they further have to make a provision of 15 per cent.
These additional provisions are over and above the
provisions already held or the provisions required to be
made as per the asset classification status of the
borrower account.
Ramnath Pradeep, former Chairman & Managing
Director of Corporation Bank, said the circular is silent
on the role of NBFCs in the implementation of the RP in
case they report a borrower as being in default and the
role of borrowers.
What the circular says
* Lenders will get a breather from the one-day default
norm
* They will get a 30-day review period to frame a
resolution strategy
* They have to submit a weekly report to the RBI on
defaults by borrowers with exposure of ₹5 crore and
above
 * New norms also applicable to small finance banks
and large NBFCs
Published on June 07, 2019
NPAs
 
RBI and other central banks

SHARE
 






  1

COMMENTS

Born Between 1965-1985? Get Term Life Insurance Worth ₹1 Cr at

Rs.1884/month*.Policybazaar.com|
Sponsored

Should You Sell When FIIs Are Selling Motilal Oswal Mutual funds|
Sponsored

Cancer has made this 5-yr-old look like an adult. Help him Ketto|
Sponsored

Global MBA Degree From Australia and UK Based

Universities.upGrad|
Sponsored

India’s Most Loved Rummy Site. Play Now !Rummy Passion|

Sponsored

7 Yoga Poses You Should Do First Thing In The Morning Work + Money|
Sponsored

The Cost of a Las Vegas Apartment Might Surprise You Apartments in Las Vegas | Search
Ads|
Sponsored

Netflix Users - Access Hundreds of New Titles Using This Tool! ExpressVPN|
Sponsored

Hyderabad man makes coronavirus car to spread

awarenessIndia Today|
Sponsored

These 5 VPNs Allow You To Watch New Streaming

TitlesTheTopFiveVPN|
Sponsored

कोरोना पर सिद्धू का सवाल- भारत में कम टे स्ट क्यों? अपनाया जाए साउथ कोरिया मॉडल Aaj Tak|
Sponsored

A $45 Billion Bet On India Is Rapidly Unravelling: Economists www.ndtv.com|

Sponsored

Best Places in India where you can Settle Down after Retirement VT Settle|
Sponsored

Uddhav Thackeray’s communication skills shine on amidst

Covid-19 crisisThe Hindu Businessline

Karti Chidambaram takes a dig at Jairam Ramesh over

suspension of MPLADSThe Hindu Businessline

Recommended for you

Lockdown impact: Peak power demand down 25% last week

Infosys to declare Q4 results on April 20
Light at the end of Covid tunnel? A tenth of ‘+ve’ patients recover
Karnataka puts together revival plan, waits for Centre’s guidelines to open
liquor shops
IIT Guwahati researchers develop antiviral coating for PPEs

TRENDING
Uddhav Thackeray’s communication skills shine on amidst
Covid-19 crisis

Karti Chidambaram takes a dig at Jairam Ramesh over

suspension of MPLADS
PM Modi terrific, ‘will not be forgotten’: US President
Donald Trump
NBA urges Congress President to withdraw statement on
complete ban on government ads
by Taboola
Promoted Links
You May Like

Born Between 1965-1985? Get Term Life Insurance Worth ₹1

Cr at Rs.1884/month*.Policybazaar.com

Should You Sell When FIIs Are SellingMotilal Oswal Mutual funds

Cancer has made this 5-yr-old look like an adult. Help

himKetto

Global MBA Degree From Australia and UK Based

Universities.upGrad

India’s Most Loved Rummy Site. Play Now !Rummy Passion

7 Yoga Poses You Should Do First Thing In The MorningWork +

Money
Lifting of lockdown: Ball in PM’s court

Nikon India to offer free online photography classes till April

30

PM Modi has taken correct decision to extend lockdown:

Kejriwal

Trump warns WHO of fund cut for being biased towards

China

 Specials
 Portfolio
 BL Ink
 Catalyst
 India File

From the WHO

Fantasy creature Ario helps kids to deal with Covid

Coming Up

First world Chagas disease dayFor the first time, the global community will celebrate
World Chagas Disease ...

My Five: Breakfast like a king & some quality sleep

Dr KM CherianFounder & CEO, Frontier Lifeline Hospital1 . Water is known to be the best
natural hydrating ...

Hospitals: Firefighting Covid and taking guard against new crises

They will need to reinvent themselves and be ready for future emergencies
Since default with any lender is a lagging indicator of
financial stress faced by the borrower, the circular said,
“it is expected that the lenders initiate the process of
implementing an RP even before a default.”
While the defunct circular was applicable only to
Scheduled Commercial Banks (excluding Regional Rural
Banks) and all-India financial institutions, the new
circular is also applicable to small finance banks and
systemically important non-deposit taking non-banking
financial companies (NBFCs) and deposit-taking NBFCs.
In cases where the RP is to be implemented, all lenders
have to enter into an inter-creditor agreement (ICA) for
the resolution of stressed assets during the review
period to provide for ground rules for finalisation and
implementation of the RP in respect of borrowers with
credit facilities from more than one lender.
Under the ICA, any decision agreed to by the lenders
representing 75 per cent of total outstanding credit
facilities by value and 60 per cent by number will be
binding upon all the lenders. In particular, the RPs will
provide for payment which will not be less than the
liquidation value due to the dissenting lenders.
In cases where the aggregate exposure of a borrower to
lenders (scheduled commercial banks, all-India financial
institutions and small finance banks) is ₹2,000 crore
and above, the RP has to be implemented within 180
days from the end of the review period, and the
reference date has been set as June 7, 2019.
In the case of borrowers in the ₹1,500 crore and above
but less than ₹2,000 crore category, January 1, 2020
has been set as the reference date for implementing
the RP. In the less than ₹1,500 crore category, the RBI
will announce the reference date in due course.
Additional provisions
If the implementation of an RP crosses the stipulated
180 days from the end of the review period, the lenders
have to make additional provisions of 20 per cent of the
outstanding loan. If this timeline exceeds 365 days,
they further have to make a provision of 15 per cent.
These additional provisions are over and above the
provisions already held or the provisions required to be
made as per the asset classification status of the
borrower account.
Ramnath Pradeep, former Chairman & Managing
Director of Corporation Bank, said the circular is silent
on the role of NBFCs in the implementation of the RP in
case they report a borrower as being in default and the
role of borrowers.
What the circular says
* Lenders will get a breather from the one-day default
norm
* They will get a 30-day review period to frame a
resolution strategy
* They have to submit a weekly report to the RBI on
defaults by borrowers with exposure of ₹5 crore and
above
 * New norms also applicable to small finance banks
and large NBFCs
Published on June 07, 2019
NPAs
 
RBI and other central banks

SHARE
 






  1

COMMENTS

Born Between 1965-1985? Get Term Life Insurance Worth ₹1 Cr at

Rs.1884/month*.Policybazaar.com|
Sponsored
Should You Sell When FIIs Are Selling Motilal Oswal Mutual funds|
Sponsored

Cancer has made this 5-yr-old look like an adult. Help him Ketto|
Sponsored

Global MBA Degree From Australia and UK Based

Universities.upGrad|
Sponsored

India’s Most Loved Rummy Site. Play Now !Rummy Passion|

Sponsored

7 Yoga Poses You Should Do First Thing In The Morning Work + Money|
Sponsored

The Cost of a Las Vegas Apartment Might Surprise You Apartments in Las Vegas | Search
Ads|
Sponsored

Netflix Users - Access Hundreds of New Titles Using This Tool! ExpressVPN|
Sponsored

Hyderabad man makes coronavirus car to spread

awarenessIndia Today|
Sponsored

These 5 VPNs Allow You To Watch New Streaming

TitlesTheTopFiveVPN|
Sponsored

कोरोना पर सिद्धू का सवाल- भारत में कम टे स्ट क्यों? अपनाया जाए साउथ कोरिया मॉडल Aaj Tak|
Sponsored
A $45 Billion Bet On India Is Rapidly Unravelling: Economists www.ndtv.com|
Sponsored

Best Places in India where you can Settle Down after Retirement VT Settle|
Sponsored

Uddhav Thackeray’s communication skills shine on amidst

Covid-19 crisisThe Hindu Businessline

Karti Chidambaram takes a dig at Jairam Ramesh over

suspension of MPLADSThe Hindu Businessline

Recommended for you

Lockdown impact: Peak power demand down 25% last week

Infosys to declare Q4 results on April 20
Light at the end of Covid tunnel? A tenth of ‘+ve’ patients recover
Karnataka puts together revival plan, waits for Centre’s guidelines to open
liquor shops
IIT Guwahati researchers develop antiviral coating for PPEs

TRENDING
Uddhav Thackeray’s communication skills shine on amidst
Covid-19 crisis

Karti Chidambaram takes a dig at Jairam Ramesh over

suspension of MPLADS
PM Modi terrific, ‘will not be forgotten’: US President
Donald Trump
NBA urges Congress President to withdraw statement on
complete ban on government ads
by Taboola
Promoted Links
You May Like

Born Between 1965-1985? Get Term Life Insurance Worth ₹1

Cr at Rs.1884/month*.Policybazaar.com

Should You Sell When FIIs Are SellingMotilal Oswal Mutual funds

Cancer has made this 5-yr-old look like an adult. Help

himKetto

Global MBA Degree From Australia and UK Based

Universities.upGrad

India’s Most Loved Rummy Site. Play Now !Rummy Passion

7 Yoga Poses You Should Do First Thing In The MorningWork +

Money
Lifting of lockdown: Ball in PM’s court

Nikon India to offer free online photography classes till April

30

PM Modi has taken correct decision to extend lockdown:

Kejriwal

Trump warns WHO of fund cut for being biased towards

China

 Specials
 Portfolio
 BL Ink
 Catalyst
 India File

From the WHO

Fantasy creature Ario helps kids to deal with Covid

Coming Up

First world Chagas disease dayFor the first time, the global community will celebrate
World Chagas Disease ...

My Five: Breakfast like a king & some quality sleep

Dr KM CherianFounder & CEO, Frontier Lifeline Hospital1 . Water is known to be the best
natural hydrating ...

Hospitals: Firefighting Covid and taking guard against new crises

They will need to reinvent themselves and be ready for future emergencies
Since default with any lender is a lagging indicator of
financial stress faced by the borrower, the circular said,
“it is expected that the lenders initiate the process of
implementing an RP even before a default.”
While the defunct circular was applicable only to
Scheduled Commercial Banks (excluding Regional Rural
Banks) and all-India financial institutions, the new
circular is also applicable to small finance banks and
systemically important non-deposit taking non-banking
financial companies (NBFCs) and deposit-taking NBFCs.
In cases where the RP is to be implemented, all lenders
have to enter into an inter-creditor agreement (ICA) for
the resolution of stressed assets during the review
period to provide for ground rules for finalisation and
implementation of the RP in respect of borrowers with
credit facilities from more than one lender.
Under the ICA, any decision agreed to by the lenders
representing 75 per cent of total outstanding credit
facilities by value and 60 per cent by number will be
binding upon all the lenders. In particular, the RPs will
provide for payment which will not be less than the
liquidation value due to the dissenting lenders.
In cases where the aggregate exposure of a borrower to
lenders (scheduled commercial banks, all-India financial
institutions and small finance banks) is ₹2,000 crore
and above, the RP has to be implemented within 180
days from the end of the review period, and the
reference date has been set as June 7, 2019.
In the case of borrowers in the ₹1,500 crore and above
but less than ₹2,000 crore category, January 1, 2020
has been set as the reference date for implementing
the RP. In the less than ₹1,500 crore category, the RBI
will announce the reference date in due course.
Additional provisions
If the implementation of an RP crosses the stipulated
180 days from the end of the review period, the lenders
have to make additional provisions of 20 per cent of the
outstanding loan. If this timeline exceeds 365 days,
they further have to make a provision of 15 per cent.
These additional provisions are over and above the
provisions already held or the provisions required to be
made as per the asset classification status of the
borrower account.
Ramnath Pradeep, former Chairman & Managing
Director of Corporation Bank, said the circular is silent
on the role of NBFCs in the implementation of the RP in
case they report a borrower as being in default and the
role of borrowers.
What the circular says
* Lenders will get a breather from the one-day default
norm
* They will get a 30-day review period to frame a
resolution strategy
* They have to submit a weekly report to the RBI on
defaults by borrowers with exposure of ₹5 crore and
above
 * New norms also applicable to small finance banks
and large NBFCs
Published on June 07, 2019
NPAs
 
RBI and other central banks

SHARE
 






  1

COMMENTS

Born Between 1965-1985? Get Term Life Insurance Worth ₹1 Cr at

Rs.1884/month*.Policybazaar.com|
Sponsored
Should You Sell When FIIs Are Selling Motilal Oswal Mutual funds|
Sponsored

Cancer has made this 5-yr-old look like an adult. Help him Ketto|
Sponsored

Global MBA Degree From Australia and UK Based

Universities.upGrad|
Sponsored

India’s Most Loved Rummy Site. Play Now !Rummy Passion|

Sponsored

7 Yoga Poses You Should Do First Thing In The Morning Work + Money|
Sponsored

The Cost of a Las Vegas Apartment Might Surprise You Apartments in Las Vegas | Search
Ads|
Sponsored

Netflix Users - Access Hundreds of New Titles Using This Tool! ExpressVPN|
Sponsored

Hyderabad man makes coronavirus car to spread

awarenessIndia Today|
Sponsored

These 5 VPNs Allow You To Watch New Streaming

TitlesTheTopFiveVPN|
Sponsored

कोरोना पर सिद्धू का सवाल- भारत में कम टे स्ट क्यों? अपनाया जाए साउथ कोरिया मॉडल Aaj Tak|
Sponsored
A $45 Billion Bet On India Is Rapidly Unravelling: Economists www.ndtv.com|
Sponsored

Best Places in India where you can Settle Down after Retirement VT Settle|
Sponsored

Uddhav Thackeray’s communication skills shine on amidst

Covid-19 crisisThe Hindu Businessline

Karti Chidambaram takes a dig at Jairam Ramesh over

suspension of MPLADSThe Hindu Businessline

Recommended for you

Lockdown impact: Peak power demand down 25% last week

Infosys to declare Q4 results on April 20
Light at the end of Covid tunnel? A tenth of ‘+ve’ patients recover
Karnataka puts together revival plan, waits for Centre’s guidelines to open
liquor shops
IIT Guwahati researchers develop antiviral coating for PPEs

TRENDING
Uddhav Thackeray’s communication skills shine on amidst
Covid-19 crisis

Karti Chidambaram takes a dig at Jairam Ramesh over

suspension of MPLADS
PM Modi terrific, ‘will not be forgotten’: US President
Donald Trump
NBA urges Congress President to withdraw statement on
complete ban on government ads
by Taboola
Promoted Links
You May Like

Born Between 1965-1985? Get Term Life Insurance Worth ₹1

Cr at Rs.1884/month*.Policybazaar.com

Should You Sell When FIIs Are SellingMotilal Oswal Mutual funds

Cancer has made this 5-yr-old look like an adult. Help

himKetto

Global MBA Degree From Australia and UK Based

Universities.upGrad

India’s Most Loved Rummy Site. Play Now !Rummy Passion

7 Yoga Poses You Should Do First Thing In The MorningWork +

Money
Lifting of lockdown: Ball in PM’s court

Nikon India to offer free online photography classes till April

30

PM Modi has taken correct decision to extend lockdown:

Kejriwal

Trump warns WHO of fund cut for being biased towards

China

 Specials
 Portfolio
 BL Ink
 Catalyst
 India File

From the WHO

Fantasy creature Ario helps kids to deal with Covid

Coming Up

First world Chagas disease dayFor the first time, the global community will celebrate
World Chagas Disease ...

My Five: Breakfast like a king & some quality sleep

Dr KM CherianFounder & CEO, Frontier Lifeline Hospital1 . Water is known to be the best
natural hydrating ...

Hospitals: Firefighting Covid and taking guard against new crises

They will need to reinvent themselves and be ready for future emergencies
Since default with any lender is a lagging indicator of
financial stress faced by the borrower, the circular said,
“it is expected that the lenders initiate the process of
implementing an RP even before a default.”
While the defunct circular was applicable only to
Scheduled Commercial Banks (excluding Regional Rural
Banks) and all-India financial institutions, the new
circular is also applicable to small finance banks and
systemically important non-deposit taking non-banking
financial companies (NBFCs) and deposit-taking NBFCs.
In cases where the RP is to be implemented, all lenders
have to enter into an inter-creditor agreement (ICA) for
the resolution of stressed assets during the review
period to provide for ground rules for finalisation and
implementation of the RP in respect of borrowers with
credit facilities from more than one lender.
Under the ICA, any decision agreed to by the lenders
representing 75 per cent of total outstanding credit
facilities by value and 60 per cent by number will be
binding upon all the lenders. In particular, the RPs will
provide for payment which will not be less than the
liquidation value due to the dissenting lenders.
In cases where the aggregate exposure of a borrower to
lenders (scheduled commercial banks, all-India financial
institutions and small finance banks) is ₹2,000 crore
and above, the RP has to be implemented within 180
days from the end of the review period, and the
reference date has been set as June 7, 2019.
In the case of borrowers in the ₹1,500 crore and above
but less than ₹2,000 crore category, January 1, 2020
has been set as the reference date for implementing
the RP. In the less than ₹1,500 crore category, the RBI
will announce the reference date in due course.
Additional provisions
If the implementation of an RP crosses the stipulated
180 days from the end of the review period, the lenders
have to make additional provisions of 20 per cent of the
outstanding loan. If this timeline exceeds 365 days,
they further have to make a provision of 15 per cent.
These additional provisions are over and above the
provisions already held or the provisions required to be
made as per the asset classification status of the
borrower account.
Ramnath Pradeep, former Chairman & Managing
Director of Corporation Bank, said the circular is silent
on the role of NBFCs in the implementation of the RP in
case they report a borrower as being in default and the
role of borrowers.
What the circular says
* Lenders will get a breather from the one-day default
norm
* They will get a 30-day review period to frame a
resolution strategy
* They have to submit a weekly report to the RBI on
defaults by borrowers with exposure of ₹5 crore and
above
 * New norms also applicable to small finance banks
and large NBFCs
Published on June 07, 2019
NPAs
 
RBI and other central banks

SHARE
 






  1

COMMENTS

Born Between 1965-1985? Get Term Life Insurance Worth ₹1 Cr at

Rs.1884/month*.Policybazaar.com|
Sponsored
Should You Sell When FIIs Are Selling Motilal Oswal Mutual funds|
Sponsored

Cancer has made this 5-yr-old look like an adult. Help him Ketto|
Sponsored

Global MBA Degree From Australia and UK Based

Universities.upGrad|
Sponsored

India’s Most Loved Rummy Site. Play Now !Rummy Passion|

Sponsored

7 Yoga Poses You Should Do First Thing In The Morning Work + Money|
Sponsored

The Cost of a Las Vegas Apartment Might Surprise You Apartments in Las Vegas | Search
Ads|
Sponsored

Netflix Users - Access Hundreds of New Titles Using This Tool! ExpressVPN|
Sponsored

Hyderabad man makes coronavirus car to spread

awarenessIndia Today|
Sponsored

These 5 VPNs Allow You To Watch New Streaming

TitlesTheTopFiveVPN|
Sponsored

कोरोना पर सिद्धू का सवाल- भारत में कम टे स्ट क्यों? अपनाया जाए साउथ कोरिया मॉडल Aaj Tak|
Sponsored
A $45 Billion Bet On India Is Rapidly Unravelling: Economists www.ndtv.com|
Sponsored

Best Places in India where you can Settle Down after Retirement VT Settle|
Sponsored

Uddhav Thackeray’s communication skills shine on amidst

Covid-19 crisisThe Hindu Businessline

Karti Chidambaram takes a dig at Jairam Ramesh over

suspension of MPLADSThe Hindu Businessline

Recommended for you

Lockdown impact: Peak power demand down 25% last week

Infosys to declare Q4 results on April 20
Light at the end of Covid tunnel? A tenth of ‘+ve’ patients recover
Karnataka puts together revival plan, waits for Centre’s guidelines to open
liquor shops
IIT Guwahati researchers develop antiviral coating for PPEs

TRENDING
Uddhav Thackeray’s communication skills shine on amidst
Covid-19 crisis

Karti Chidambaram takes a dig at Jairam Ramesh over

suspension of MPLADS
PM Modi terrific, ‘will not be forgotten’: US President
Donald Trump
NBA urges Congress President to withdraw statement on
complete ban on government ads
by Taboola
Promoted Links
You May Like

Born Between 1965-1985? Get Term Life Insurance Worth ₹1

Cr at Rs.1884/month*.Policybazaar.com

Should You Sell When FIIs Are SellingMotilal Oswal Mutual funds

Cancer has made this 5-yr-old look like an adult. Help

himKetto

Global MBA Degree From Australia and UK Based

Universities.upGrad

India’s Most Loved Rummy Site. Play Now !Rummy Passion

7 Yoga Poses You Should Do First Thing In The MorningWork +

Money
Lifting of lockdown: Ball in PM’s court

Nikon India to offer free online photography classes till April

30

PM Modi has taken correct decision to extend lockdown:

Kejriwal

Trump warns WHO of fund cut for being biased towards

China

 Specials
 Portfolio
 BL Ink
 Catalyst
 India File

From the WHO

Fantasy creature Ario helps kids to deal with Covid

Coming Up

First world Chagas disease dayFor the first time, the global community will celebrate
World Chagas Disease ...

My Five: Breakfast like a king & some quality sleep

Dr KM CherianFounder & CEO, Frontier Lifeline Hospital1 . Water is known to be the best
natural hydrating ...

Hospitals: Firefighting Covid and taking guard against new crises

They will need to reinvent themselves and be ready for future emergencies