RBI takes close look at 'standstill agreements', plans to tighten norms

RBI plans to tighten norms on such deals between promoters, lenders

The Reserve Bank of India (RBI) has taken a serious view of the recent cases of ‘standstill agreements’ by companies with lenders to delay selling pledged shares.

RBI sources said the central bank was closely monitoring the situation and, if necessary, would tighten norms to dissuade lenders from entering into such agreements with companies.

“The RBI has taken a serious view of the recent cases. The central bank has been particularly working hard to curb all forms of ‘evergreening’ of loans. We may tighten the norms so that lenders, especially non-banking financial companies (NBFCs), are discouraged from entering into such