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India Eases Bad-Debt Resolution Rules, Giving Banks More Leeway

  • Country has world’s worst ratio of non-performing loans
  • Central bank allows more time for resolution after default
The Reserve Bank of India headquarters in Mumbai.

The Reserve Bank of India headquarters in Mumbai.

Photographer: Adeel HalimBloomberg

The Reserve Bank of India eased rules to give lenders laden with bad debt more time to resolve delinquent accounts and lifted a deadline for pushing defaulters into bankruptcy courts.

The directive, which also covers shadow banks, gives lenders 30 days to review a delinquent account and a further 180 days to implement a resolution plan, loosening the previous timeline. Lenders must make additional provisions if there are delays in executing the plan, the central bank said Friday.