Reserve Bank Governor Shaktikanta Das on Thursday said cooperative lenders will soon be able to enter into technical write-offs and settlement agreements with defaulting borrowers. Das said the RBI has decided to widen the scope of the framework for resolution of stressed assets, under which all regulated entities, including co-operative lenders, will now be able to resolve non-performing assets through “compromised settlement and technical write-off”. Will be able to execute.
Till now, this avenue for floating asset resolution was available only with scheduled commercial banks and select non-bank finance companies, Das said, adding that comprehensive guidelines on this would be issued soon. It may be noted that the co-operative lending sector often grabs headlines for lack of governance practices and conflict of interest.
Das also said that it is proposed to rationalize the existing prudential norms on restructuring of borrower accounts affected by natural calamities. The Governor also acknowledged that a need has arisen to mitigate the implementation challenges faced by other UCBs (Urban Co-operative Banks) on priority sector lending targets, and extended the timeline for achieving the targets by two more years by March 2026. announced to extend up to Lenders who have met the targets by March 31, 2023, will be given suitable incentives, he said.
In order to further facilitate orderly growth of digital lending ecosystem and enhance credit penetration in the economy, RBI has decided to introduce Default Loss Guarantee Mechanism in Digital Lending. “With a view to further promote responsible innovation and prudent risk management, it has been decided to issue Guidelines on Default Loss Guarantee Arrangements in Digital Lending,” Das said. RBI has decided to rationalize and simplify the licensing framework for Authorized Persons under the Foreign Exchange Management Act (FEMA), 1999, with a view to increasing efficiency in delivery of foreign exchange facilities to various segments of users including members of the public, tourists and businesses. can be improved. ,
Das said that in order to further enhance the efficiency of the Bharat Bill Payment System and encourage greater participation, the RBI has proposed to streamline the transaction process flow and membership criteria for operational units. Das said that with a view to providing greater flexibility for managing liquidity, it has been decided that scheduled commercial banks, except small finance banks, may borrow in the call and notice money market within the prescribed prudential limits for inter-bank liabilities. You can set your own limit.
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