Economy

Ensure timely resolution for better valuation, RBI deputy governor Vishwanathan tells banks

Updated : August 20, 2019 12:24 PM IST

Vishwanathan was addressing the gathering at the FICCI-IBA annual meet, FIBAC 2019.

Ensure timely resolution for better valuation, RBI deputy governor Vishwanathan tells banks

Reserve Bank of India (RBI) deputy governor NS Vishwanathan today stressed on the importance of credit discipline for banks, urging them to ensure timely resolutions for better value creation.

Vishwanathan was addressing the gathering at the FICCI-IBA annual meet, FIBAC 2019.

"Timely resolution is very important. I would request you to ensure that the resolutions are done in time, not just for the regulatory requirement but also because it will result in better valuation going forward," he said.

Speaking about the June 7 circular on Prudential Framework for Resolution of Stressed Assets, Vishwanathan said RBI has given a lot of freedom to banks to determine contours of resolution plan under June 7 circular. "We are making less intrusive regulations and hope that banks will use this to deal with genuine stress in their balance sheets to address the problem," he said.

The June 7 circular proposes a 30-day "Review Period" for lenders to decide on a resolution strategy, and sign an Inter Creditor Agreement for the implementation of the resolution plan in 180 days.

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