RBI may tweak Feb 12 circular on stressed assets to 30-day grace period

New circular to treat term loan, cash credit on par with reference to buffer

The Reserve Bank of India (RBI) is likely to replace the controversial one-day default norm and give a grace period of 30 days to identify the early stress of borrowers. This will form part of the revised February 12 circular, which is in the works, and would come as a breather for India Inc.

Under the February 12 circular, even a one-day default on the principal or interest payment, or any other amount, wholly or partly, would lead to banks classifying the account as a special mention account (SMA). The Supreme Court had struck down the RBI’s February 12 circular last