Nifty Futures, RBI outlines broad plans on $150 billion bank bad loan resolution

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The Reserve Bank of India (RBI) outlined on Monday the broad contours of a plan to resolve the $150 billion bad debt problem plaguing the country's banks.

The move comes about two weeks after the Indian government changed rules giving the central bank greater power to deal with bad loans.

Among the plans announced late on Monday, the RBI said it is reviewing and would make necessary changes to current guidelines for the restructuring of stressed loans. It is also working on a framework to help "facilitate an objective and consistent decision-making process," for cases that can be taken to insolvency courts.

In a bid to avoid borrowers shopping around for credit ratings, the RBI said it is "exploring the feasibility of rating assignments being determined by the Reserve Bank itself and paid for from a fund to be created out of contribution from the banks and the Reserve Bank".