The Reserve Bank of India (RBI) has cut minimum criteria for implementing corrective action plan (CAP) for resolution of stressed assets. According to the central bank, any non-adherence to the instructions and timelines specified under the framework shall attract monetary penalties on the concerned banks under the provisions of the Banking Regulation Act 1949.
“To facilitate timely decision making, it has been decided that, henceforth, the decisions agreed upon by a minimum of 60% of creditors by value and 50% of creditors by number in the joint lending forum (JLF) would be considered as the basis for deciding the corrective action plan (CAP), and will be binding on all lenders, subject to the exit (by substitution) option available in the framework,” RBI said.
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