Study Material | Test Series
Drishti IAS
call1800-121-6260 / 011-47532596
Drishti The Vision Foundation
(A unit of VDK Eduventures Pvt. Ltd.)
prelims Test Series 2019
बेसिक इंग्लिश का दूसरा सत्र (कक्षा प्रारंभ : 22 अक्तूबर, शाम 3:30 से 5:30)
Guidelines for loan restructuring norms by NBFCs
Jan 24, 2014

In order to minimise the risk of defaults, RBI has issued revised guidelines for loan restructuring norms by non-banking financial companies, NBFCs. 

The key provisions include that the relaxation or extension of commencement of projects will not amount to restructuring for infrastructure, non-infrastructure and corporate real estate projects. RBI, further, said that a special classification benefit will be provided to corporate debt restructuring cases, including small and medium enterprises. The benefit will, however, be withdrawn with effect from April 1 next year.

The Reserve Bank has also permitted Asset Reconstruction Companies, ARCs to convert debt of crisis-ridden companies into equities as part of restructuring process. ARCs can convert a portion of debt into shares of the borrower company as a measure of asset reconstruction, provided their shareholding does not exceed 26 per cent of the post converted equity of the company under reconstruction. ARCs are specialised entities that pick up stressed assets of banks and financial institutions at a discount and make recovery.  

Helpline Number : 87501 87501
To Subscribe Newsletter and Get Updates.