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RBI has advised banks to report, the details of accounts having aggregate fund-based
and non-fund based exposure of Rs.50 million and above with them and showing signs of
stress (accounts where principal or interest payment is overdue for more than 30 days or
accounts showing signs of incipient stress), to Central Repository of Information on Large
Credits (CRILC).
Where the principal or interest payment of an account reported to CRILC is overdue
between 61-90 days and if the aggregate exposure (AE) [fund based and non-fund based
taken together] of lenders in that account is Rs 1000 million and above, the lenders should
mandatorily form a committee to be called Joint Lenders Forum (JLF) . Lenders also have
the option of forming a JLF even when the AE in an account is less than Rs.1000 million
and/or when the principal or interest payment is overdue for a period less than 61-90
days.
Under the JLF framework for revitalising distressed assets in the economy, even before a loan
account turns into an NPA, the new system helped identify the stress by segregating the accounts
Under the stressed asset norms of RBI that took effect on 1 April 2014, as soon as
interest payments on a loan are delayed by 60 days, a JLF comprising all lenders must be
put in place
And within 45 days, the JLF must come up with a corrective action plan (CAP) and decide
whether the debtor merely needs some hand-holding, or if the forum should opt for debt
restructuring or recovery.
Advantage to Banks
All JLF cases should be subject to credible independent scrutiny on expected future cash
flows and where these do not support the current level of debt, SDR; recovery or
JLF as a construct should be retained as it is able to get the stakeholders on the table and
This may be painful in the short term, it is likely to yield much better results over the
Advantage to Company
The measures are intended to turn-around the entity/company without any change in terms and
Sr.
Particular Reference Link
No.
Framework for Revitalizing Distressed
Assets in the Economy Guidelines on https://www.rbi.org.in/scripts/Notificatio
1
Joint Lenders Forum (JLF) and Corrective nUser.aspx?Id=8754&Mode=0
Action Plan (CAP)
Framework for Revitalizing Distressed
https://rbi.org.in/scripts/NotificationUser.as
Assets in the Economy Review of the
2 px?Id=10034&Mode=0
Guidelines on Joint Lenders Forum (JLF)
and Corrective Action Plan (CAP)
Source: RBI