Page 45 - Banking Finance May 2019 N

ARTICLE

RBI'S REVISED

FRAMEWORK- THE

NEW DIMENSIONS

FOR RESOLUTION OF

STRESSED ASSETS

B anking industry is passing through a very difficult plough back of profits to the capital base. Overall the image

of the banks gets affected.
phase with various complexities like scarcity of
capital, sluggish growth of credit & marginal
profitability along with deteriorating asset quality
level of stress in banking industries, our regulator RBI has
& rise in delinquency. In today's scenario a major emphasis To safeguard Banks from this situation and to minimize the
is to control the deteriorating asset quality which has come out with a harmonized and simplified generic
impacted in rise of stress on Bank's Balance sheet. The main framework for resolution of stressed assets on 12th
concern of Banks at present is to minimize the level of Stress February, 2018 which has redefined the concept of stress in
Assets/Non-Performing Assets in their loan books as much Bank assets and its timely resolution. With the introduction
as possible. of the Revised Framework for Resolution of Stressed Assets,
RBI has now withdrawn all the below mentioned extant
Due to rise in Stress Assets/NPA the funds are getting instructions on resolution of stressed assets with immediate
blocked, resulting in less recycling of funds which could have effect (12.02.2018).
earned profit for Bank and more provisioning causing a
negative impact on the bottom line of bank along with less Y Framework for revitalizing distressed assets
About the author Y CDR
Y SDR

B. B. Lenka Y 5:25 Scheme
Chief Manager, Faculty Y Change in ownership outside SDR
Union Bank of India Staff College
Bangalore Y S4A
Y JLF Mechanism

BANKING FINANCE | MAY | 2019 | 45