First Notes - 23 November 2016

First Notes - 23 November 2016

RBI modifies guidelines on schemes related to stressed assets

1000

Also on KPMG.com

Background

The Reserve Bank of India (RBI), issued various notifications in the past, aimed at strengthening the ability of lenders in India to deal with stressed assets. Some of these include notifications which provide guidelines for a scheme of:

  • Strategic Debt Restructuring (SDR) (DBR.BP.BC.No.101/21.04.132/ 2014-15 dated 8 June 2015), and
  • Sustainable Structuring of Stressed Assets (DBR.No.BP.BC.103/ 21.04.132/2015-16 dated 13 June 2016). 

These schemes provided an avenue to rework the financial structure of entities facing genuine difficulties and to require coordinated deep financial restructuring.

New development

On 10 November 2016, RBI through its notifications DBR.No.BP.BC.33/ 21.04.132/2016-17 and DBR.No.BP.BC.34/21.04.132/2016-17, made certain revisions to the guidelines referred above.

These changes are aimed at achieving the following:

  • Harmonisation of stand-still clause as applicable in case of SDR scheme with other guidelines
  • Clarification on the deemed Date of Commencement of Commercial Operations (DCCO), and
  • Partial modification of certain guidelines based on the experience gained in using these tools in resolving the stressed assets as well as feedback received from stakeholders, and taking into consideration the requirements of the construction sector.

This issue of First Notes provides a synopsis of the significant modifications made by RBI to the schemes related to stressed assets.

To access the text of the RBI circular on revisions made in schemes for stressed assets, please click here.

To access the text of the RBI circular on revisions made in scheme for sustainable structuring of stressed assets, please click here.
 

© 2017 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

Connect with us

 

Request for proposal

 

Submit

KPMG’s new-look website

KPMG has launched a state of the art digital platform that enhances your experience and provides improved access to our content and our people, whatever device you are on.

 
Read more