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Reserve Bank of India (RBI) Governor Shaktikanta Das has said the RBI has decided to widen the scope of the framework for resolution of stressed assets, under which all the regulated entities including cooperative lenders will now be able to execute ‘compromise settlements and technical write-offs’ to resolve non-performing assets (NPAs).

Das stated that till now, this avenue for dud asset resolutions was available only with scheduled commercial banks and select non-bank finance companies. He added that comprehensive guidelines on the same will be released soon. It can be noted that the cooperative lending sector frequently makes headlines for lack of governance practices and conflicts of interest. He also said that it is proposed to rationalise the extant prudential norms on restructuring of borrower accounts affected by natural calamities.

The Governor also acknowledged that a need has arisen to ease the implementation challenges faced by other UCB (urban cooperative banks) on the priority sector lending targets, and announced to extend the timelines for achieving the targets by two more years up to March 2026. He said lenders which have met the targets as on March 31, 2023 shall be suitably incentivized.