Banks can initiate loan recovery proceedings without waiting for an account to be formally classified as non-performing, as the latest amendments to banking rules allow for faster resolution of their bad debt problem, a senior government official said.
Under Reserve Bank of India rules, a loan becomes non-performing if the interest or instalment of principal remains overdue for more than 90 days. “Under the ordinance, we have clarified that the default will be considered as per bankruptcy laws, which means if the payment is missed it turns into a default the next day,” said the official.
via RBI: Banks don’t need to wait 90 days to start loan recovery – The Economic Times
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