Beleaguered bankers on Tuesday demanded that the Reserve Bank of India ease conditions on loans that would qualify for restructuring under the so-called S4A scheme and permit them to spread the losses arising out of such a deal over many quarters, said two people familiar with the matter.
Bankers told the regulator during a meeting that changes in the rules governing restructuring is essential for the banking sector to overcome the Rs 12 lakh crore of stressed assets in the system and begin lending actively again, said those people who did not want to be identified.
“The crucial demand was that S4A should be permitted even if the sustainable portion of the loan is below 50%,” said one of the persons. “Because there are huge loans, which even if 30% or 40% is restructured it would be a big boost to the industry.”
The RBI, banks and the government have been contemplating ways to resolve the bad loans logjam that’s crippling the sector. Many state-run banks are precariously low on capital adequacy; and in cases like IDBI BankBSE 1.25 %, the regulator has imposed restrictions on lending and other activities. An e-mail sent to RBI spokesperson about the deliberations did not get a response.
via loans: Banks urge RBI to soften qualifying norms for S4A scheme – The Economic Times
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