New S4A norms: More flexibility for banks?

The Reserve Bank of India (RBI) is all set to tweak the rules governing the resolution of bad loans. The Scheme for Sustainable Structuring of Stressed Assets (S4A) may be watered down to allow more flexibility for banks, reports CNBC-TV18.

People close to the developments say banks are lobbying hard for further relaxations to the S4A Scheme seeking it be made applicable to projects under implementation as well. They have also made demand for lower provision for S4A accounts.

Banks are asking RBI to allow changes in repayment schedule of sustainable portion of debt, including 5/25 besides asking for norms to allow cases with less than 50 percent sustainable debt to also be considered for S4A.

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