Does RBI circular dilute the penal measures on borrowers classified as wilful defaulter or fraud?
In view of Bank unions AIBOC and AIBEA have opposed the Reserve Bank’s move to allow lenders to settle loans of wilful defaulters under compromise settlement, the central bank in a follow-up on Monday issued FAQs (Frequently Asked Questions) related to its June 8 circular. RBI denied that it has introduced a new clause permitting…
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What is Technical write-off, is it a normal banking practice?
Regulated Entities like banks and NBFCs may undertake technical write-offs in loan accounts that are either considered unrecoverable or whose recovery is likely to consume disproportionate resources of the lenders. The board approval will be required for compromise settlements or technical write-offs for accounts categorised as wilful defaulters or fraud. As for technical or prudential…
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RBI provides guidelines on Default Loss Guarantee (DLG) in Digital Lending
The Reserve Bank of India came out with guidelines on the Default Loss Guarantee (DLG) in Digital Lending, a move aimed at ensuring the orderly development of the credit delivery system. The Default Loss Guarantee (DLG) is a contractual arrangement, between Regulated Entities like banks, non-banking finance companies, and lending service providers (LSPs, popularly known…
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RBI frames policies for undertaking compromise settlements and technical write offs
RBI permitted Regulated Entities (Res) like banks, NBFCs, and other financial institutions to put in place Board-approved policies for undertaking compromise settlements with the borrowers as well as for technical write-offs. Compromise settlement for this purpose shall refer to any negotiated arrangement with the borrower to fully settle the claims of the RE against the…
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Launch of Udyam Assist Platform for validation of Informal Micro Enterprises
Informal Micro Enterprises (IMEs) were defined as those enterprises which are unable to get registered on the Udyam Registration Portal (URP) due to a lack of mandatory required documents such as Permanent Account Number (PAN) or Goods and Services Tax Identification Number (GSTIN). As per the existing guidelines, all lenders were required to obtain a…
CGTMSE scheme revamped with reduced premium and raising guarantee limit
Union MSME Minister Narayan Rane on Thursday launched the revamped Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme. The modifications included a reduction in guarantee fees for loans up to ₹1 crore by 50% to the level of 0.37% per annum only. Another major change announced was raising of ceiling for the…
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