Revised framework to deal with NPA: Part 2

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This post is in continuation of earlier post of Deputy Governor speech. Click here to access earlier part.

On April 18, 2018 , N. S. Vishwanathan, Deputy Governor, Reserve Bank of India delivered a speech at National Institute of Bank Management, Pune. His title of speech was “It is not Business as Usual for Lenders and Borrowers” . in his speech he has talked about the new circular of February 12, 2018 (Resolution of Stressed Assets – Revised Framework). He answered why this framework is required and answered many of criticism about this framework.

But before that he has talked about the reasons behind substantial increase in NPA after March 2015. How AQR and CRILC helped in recognizing the true asset quality. This part of speech has been discussed in earlier post Rest of speech will be discussed in different post. Click here to access earlier part.

In the following video, it has been discussed why SDR mechanism was failed and how Asset Quality Forbearance has been misused. It has also been touch upon why RBI is having various schemes to resolve NPA problem? And why the new framework is required?

On basis of above partial speech ( 7th to 12th paragraph of speech) you should able to answer following questions.

  1. After how many days a sub-Standard assets converted into Doubtful asset?
  2. What do you understand by Assets quality forbearance and why it was withdrawn?
  3. When the announced of withdrawn of forbearance of asset quality was made and when actually it was withdrawn?
  4. Even after withdrawn of Assets quality forbearance why there is difference between NPA and Stressed Assets.
  5. There was 3R frame work. In this “R”s stands for what?
  6. Why IBC framework is called as Process – Oriented and Time-Oriented  ?
  7. What changes were done in Banking regulation Act for good implementation of IBC and why ?
  8. What is the function Internal Advisory Committee ( IAC) and what opinion  it has given?

In case of any doubt or you are not able to answer these questions confidently you may ask  in comment section.