India's banks, for long laboring under a mountain of bad loans, can expect a government intervention soon, multiple sources have told News18.
The RBI's oversight committee (OC) is likely to get special powers to resolve NPAs. So far, the OC does not have authority to resolve NPAs. The OC was set up under the scheme for sustainable structuring of stressed assets (S4A) to oversee the loan restructuring process in a transparent manner.
Moneycontrol.com, a sister website of News18, said the new policy would allow banks to take a haircut within a permissible limit, although the banks have been reluctant. But the policy has in-place a new formula on cash-to-cash basis. The OC will recommend how much of a haircut banks can go for using this formula.
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