The ReserveBank of India will ease some rules around a scheme forrestructuring stressed accounts on a bank balance sheet, Mint reported Oct. 5.
The Indian central bank will allow banks to classify the sustainableportion of a stressed company's debt as a standard asset to ease some of theincreased provisioning for such debt, according to RBI Governor Urjit Patel.
Currently, banks are required to set aside 20% of the totaloutstanding loan amount or 40% of the unsustainable debt portion as provision.
The move will help banks resolve stressed assets faster,said N.S. Venkatesh, executive director of Lakshmi Vilas Bank Ltd.
The move comes after the central bank aggressively pushedbanks to identify stressed loans and increased their provisions for them.