Banks In Focus As RBI Tightens NPA Recognition Norms

Shares of banks will be in focus after the Reserve Bank of India (RBI) late Monday brought out new rules for recognition of stressed assets by commercial banks and revoked all old rules.

The new framework focuses on harmonizing the RBI norms with those under Insolvency and Bankruptcy Code 2016, with emphasis on timelines for taking stressed companies to the National Company Law Tribunal and on expediting reporting of default.

The new rules could see higher non-performing assets being recognized by banks, greater provisioning for recognized bad loans and stricter conditions for restructuring of stressed loans.

On Monday, the Nifty Bank index ended at 25701.60 points, up 0.9%.
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