Reserve Bank of India announces new bad-loan-resolution framework

The Reserve Bank of India said late on Monday it was withdrawing all its existing mechanisms for tackling bad debt at Indian banks and replacing them with a harmonised and simplified generic framework for resolving stressed assets.

The new system will force lenders to identify and tackle any stressed-asset accounts more rapidly, the regulator said.

Last year, India tweaked its laws to give the central bank more authority to push lenders to deal with the nearly $150 billion in troubled debt at banks, which has choked off new lending and slowed the economy.

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