First Notes


First Notes is our ‘hot, off the press’ update that aims to provide a very timely heads up on key accounting and regulatory developments that affect reporting for entities in India. It is one more way for us to connect with you, in addition to the monthly Accounting and Auditing Update.

The RBI reviews guidelines on joint lenders’ forum and corrective action plan

The Reserve Bank of India (RBI) on 30 January 2014 had released a ‘Framework for Revitalising Distressed Assets in the Economy’ (the Framework) effective from 1 April 2014. The Framework lays down guidelines for early recognition of financial distress, taking prompt steps for resolution, and thereby attempting to ensure fair recovery for lending institutions. For operationalising the above Framework, the RBI has issued various notifications that provide guidelines on refinancing of project loans, sale of non-performing assets by banks, guidelines on formation of joint lenders’ forum, adoption of corrective action plan and other regulatory measures. The RBI has received representations from banks and the Indian Banks’ Association stating that difficulties are being faced by them in effective implementation of the Framework. Therefore, on 21 October 2014, the RBI has introduced certain changes in the Framework and its guidelines.

This issue of First Notes provides an overview of these changes.

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