This was conveyed to the lenders at last month’s meeting between Finance Minister Arun Jaitley and the heads of PSU banks.
According to ministry sources, some banks were under the impression that only cases under the Scheme for Sustainable Structuring of Stressed Assets (S4A) are to be reviewed by the OC.
A two-member OC, which includes former State Bank of India chairman Janki Ballabh and former chief vigilance commissioner Pradeep Kumar, has been set up by the Indian Banks’ Association in consultation with both RBI and vigilance and investigating agencies.
Meanwhile, the RBI has said it will come out with modified guidelines by this month-end to allow a portion of sustainable bad loans to be treated as standard asset in a bid to effectively deal with high NPA problem.
The scheme provides flexibility in restructuring, which may involve material write-down of debt and/or making large provisions, RBI had said in the fourth bi-monthly monetary policy review for 2016-17.
Accordingly, it is proposed to allow that portion of debt determined to be sustainable to be treated as a standard asset in all cases, subject to certain conditions, it had said.