New Delhi / Mumbai: The Model Code of Conduct for the Lok Sabha polls is unlikely to have any bearing on issuance of a revised framework for resolution of stressed assets by the Reserve Bank and the guidelines are expected to be announced before May 23, sources said.
Against the backdrop of the Supreme Court quashing an RBI circular, issued on February 12, 2018, a revised set of rules is under works and would be out soon, they said. Earlier this month, the Supreme Court had quashed the RBI’s February 12 circular on stressed loan recognition and resolution of large borrowers over Rs 2,000 crore, terming it as “ultra vires”.
“The model code of conduct exempts RBI’s monetary policy. It is unlikely to attract any action if the RBI issues the revised (February 12) circular,” sources said. They said the central bank is in very advanced stage and the revised circular should be out before declaration of general elections result.
The counting for the Lok Sabha elections will take place on May 23. The RBI is looking into all the concerns raised by various stakeholders including banks and power sector companies and may look to tweak the circular without diluting it completely, sources said.
The February 12 circular had mandated banks to refer an NPA account for insolvency proceedings in case a resolution is not found within 180 days. This was for accounts where the outstanding dues was at least Rs 2,000 crore. Under the RBI norms, an account is classified as a non performing asset (NPA) if it is not serviced for 90 days.
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