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RBI asks banks to draft policies on recovery and write-off

CREDIT POLICY

The Reserve bank of India has asked the commercial banks to design and implement their own policies for recovery and to write-off bad loans, particularly in the light of experiences gained by them while executing the one-time settlement scheme, which was operative till June 30 this year.

In its mid-term review of credit policy, RBI said any scheme formulated by bank boards should be simple, non-discriminatory and transparent so that all eligible cases are accorded equal treatment.

Under the one-time settlement scheme, the public sector banks have recovered a total sum of Rs 21.92 billion from 5.23 lakh accounts.

The scheme provided a one-time impetus to reduce the stock of chronic NPAs by recovering the dues up to Rs 50 million in all sectors including tiny industries, but excluded any cases of willful default, fraud and malfeasance.

UNI

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