RBI's rules on NPAs may add to provisioning burden but aid in loan recovery

Bankers said the new framework would force defaulted accounts to the resolution path

Promoters of any large account in which the banking sector had an exposure of Rs 20 billion and above were in for trouble if they did not settle their dues soon, said experts. The impact on banks in terms of bad debt numbers and provisioning will remain elevated. 

Revising the stressed assets’ framework, the Reserve Bank of India (RBI) on Monday said these accounts, even if under restructuring, should be put through a resolution plan if the accounts were in default. 

If an account is in default with one bank, other lenders in the consortium will have to try and make the