Reserve Bank Governor Shaktikanta Das on Thursday mentioned cooperative lenders will soon be able to do technical write-offs and execute compromise settlements with defaulting debtors. RBI has determined to widen the scope of the framework for decision of harassed property, underneath which all of the regulated entities together with cooperative lenders will now be able to execute “compromise settlements and technical write-offs” to resolve non-performing property, Das mentioned.
Till now, this avenue for dud asset resolutions was accessible solely with scheduled business banks and choose non-bank finance firms, Das mentioned, including that complete tips on the identical will be launched soon. It can be famous that the cooperative lending sector regularly makes headlines for lack of governance practices and conflicts of curiosity.
Das additionally mentioned that it’s proposed to rationalise the extant prudential norms on restructuring of borrower accounts affected by pure calamities. The Governor additionally acknowledged {that a} want has arisen to ease the implementation challenges confronted by different UCB (city cooperative banks) on the precedence sector lending targets, and introduced to prolong the timelines for reaching the targets by two extra years up to March 2026. Lenders which have met the targets as on March 31, 2023 shall be suitably incentivized, he added.
To additional facilitate orderly growth of the digital lending ecosystem and improve credit score penetration within the economic system, the RBI has determined to introduce default loss assure preparations in digital lending. “With a view to further promoting responsible innovation and prudent risk management, it has been decided to issue guidelines on Default Loss Guarantee arrangements in Digital Lending,” Das mentioned. RBI has determined to rationalise and simplify the licensing framework for licensed individuals underneath Foreign Exchange Management Act (FEMA), 1999, to enhance the effectivity within the supply of international alternate services to varied segments of customers together with widespread individuals, vacationers and companies, Das mentioned.
To additional improve the effectivity of the Bharat Bill Payment System and to encourage better participation, RBI has proposed to streamline the method movement of transactions and membership standards for working items, Das mentioned. With a view to offering better flexibility for managing liquidity, it has been determined that scheduled business banks excluding Small Finance Banks can set their very own limits for borrowing in Call and Notice Money Markets inside the prescribed prudential limits for inter-bank liabilities, Das mentioned.
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