The Reserve Bank of India withdrawn the various existing restructuring schemes like Framework for Revitalising Distressed Assets, Flexible Structuring of Existing Long Term Project Loans, Strategic Debt Restructuring Scheme (SDR), Corporate Debt Restructuring Scheme, resolution of stressed assets, Change in Ownership outside SDR, Scheme for Sustainable Structuring of Stressed Assets (S4A) and made resolution of defaults time bound with the Insolvency and Bankruptcy Code, 2016 becoming the main tool to deal with defaulters. Accordingly, the Joint Lenders Forum also stands discontinued.
As per direction issued by Central Bank, companies that are in default above Rs. 2,000 crores, the Resolution Plan has to be implemented within 180 days from reference date i.e. March 1, 2018. For defaults after reference date, the Resolution Plan has to be implemented within 180 days from the day of such default.
Reserve Bank of India warned the lenders about the monetary penalties and higher provisions, if lenders fails in meeting the prescribed timelines or any actions by lenders with an intent to conceal the actual status of accounts or evergreen the stressed accounts.
RBI has also toughened the reporting norms for Lenders. Lenders shall report credit information, including classification of an account as SMA to Central Repository of Information on Large Credits (CRILC) on all borrower entities having aggregate exposure of Rs. 5 crores and above with them on a weekly basis. All the borrower entities with an exposure of upto Rs. 5 crores have to be reported on monthly basis from existing Quarterly basis w.e.f. April 01, 2018.