Settlement with borrowers only after exhausting all options, RBI to ARCs
Mumbai, Jan 20 The Reserve Bank on Monday asked Asset Reconstruction Companies to go for settlement with borrowers only after exhausting all possible ways to recover dues. The policy should, inter alia, cover aspects like a cut-off date for one-time settlement eligibility, permissible sacrifice for various categories of exposures while arriving at the settlement amount and the methodology for arriving at the realisable value of the security, said the revised guidelines on settlement of dues of borrowers by ARCs. "Settlement with the borrower shall be done only after all possible ways to recover the dues have been examined and settlement is considered as the best option available," it said. Where the settlement does not envisage payment of the entire amount agreed upon in one instalment, the proposals should be in line with and supported by an acceptable business plan, projected earnings and cash flows of the borrower.
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