The Reserve Bank of India (RBI) has come out with revised guidelines for compromise settlement of chronic non-performing assets (NPAs) of public sector banks.
The new guidelines cover will cover NPAs in all sectors, which have become doubtful or loss as on 31st March 2000, with outstanding balance of Rs 10 crore and below on the cut-off date.
As regards compromise settlement of chronic NPAs over Rs 10 crore, the central bank said the bank chiefs should personally supervise the compromise settlement of chronic NPAs on case-to-case basis.
The RBI pointed out that a review of the earlier one time settlement (OTS) involving NPAs up to Rs 5 crore has revealed that the recovery of sticky assets through this mechanism has been moderate.
