What changed
RBI extended its prudential guidelines on restructuring of advances, originally issued to banks via circular DBOD.No.BP.BC.121/21.04.132/2008-09 dated April 9, 2009, to select all-India Financial Institutions. This follows a prior circular on the same subject dated February 26, 2009. The affected FIs are Exim Bank, NABARD, NHB, and SIDBI.
What it means for you
These FIs must now align their restructuring policies with bank-level norms, ensuring uniformity in treatment of stressed advances. For lenders, this reduces regulatory arbitrage and standardizes asset quality classification across institutions. Banks may see more consistent restructuring practices among these key refinancing agencies.
What you must do
- Review your institution's restructuring policies to ensure compliance with the enclosed bank guidelines.
- Update internal procedures for classifying and reporting restructured advances as per the new norms.
- Train relevant staff on the revised prudential requirements for restructuring.
- Acknowledge receipt of this circular to RBI as instructed.
Who it affects
Exim Bank, NABARD, NHB, SIDBI, All-India Financial Institutions covered by the circular
Which FIs are covered by this circular?
The circular applies to Exim Bank, NABARD, NHB, and SIDBI.
What guidelines are being extended to these FIs?
The prudential guidelines on restructuring of advances that were issued to banks via circular DBOD.No.BP.BC.121/21.04.132/2008-09 dated April 9, 2009.
When does this circular take effect?
The circular is dated May 7, 2009, and references the enclosed bank guidelines dated April 9, 2009. The effective date is as per those guidelines.