Approved by the Board on [date to be supplied]. Adopted in line with the Reserve Bank of India’s Prudential Framework for Resolution of Stressed Assets.
Draft for compliance review. This page is a structured starting point based on the standard RBI requirements for this policy. It is not legal advice. It must be reviewed by your compliance adviser, completed where marked, and adopted by the Board before publication.
1. Our position
Borrowers get into difficulty. Sometimes it is mismanagement and sometimes it is a bad monsoon, a delayed receivable, an illness or a market that turned. A lender that treats both the same way is not being prudent — it is being lazy.
Where a borrower is willing to engage with us and the underlying business or income is viable, restructuring is usually a better outcome for both sides than enforcement. This policy sets out how we decide.
2. Early identification
Accounts are monitored for signs of incipient stress and classified on the basis of the period for which a payment has remained overdue:
| Classification | Position |
|---|---|
| SMA-0 | Principal or interest overdue between 1 and 30 days |
| SMA-1 | Overdue between 31 and 60 days |
| SMA-2 | Overdue between 61 and 90 days |
| NPA | Overdue for more than 90 days |
An account entering SMA-1 triggers contact with the borrower. The purpose of that call is to understand the position, not to apply pressure.
3. When we will consider restructuring
- The difficulty is temporary and identifiable, and the borrower can explain it
- The underlying business or source of income remains viable
- The borrower has engaged with us openly rather than avoiding contact
- There is no evidence of diversion of funds, wilful default or misrepresentation
- The security position remains adequate, or can be made adequate
4. When we will not
- Wilful default — capacity to pay exists but payment is withheld
- Diversion or siphoning of funds away from the sanctioned purpose
- Material misrepresentation in the application or subsequently
- Fraud
- The borrower has become untraceable or refuses to engage
5. Measures available
- Rescheduling of instalments and extension of tenure
- A moratorium on principal for a defined period
- Conversion of overdue interest into a funded interest term loan
- Alteration of the repayment structure to match actual cash flows
- Additional security or a guarantee, where that makes a viable plan workable
- A negotiated one-time settlement, where restructuring is not viable but enforcement would recover less
6. Process
- The borrower makes a written request setting out the position and a proposed plan.
- We assess viability — the cause of stress, the realistic cash flows, and the security position.
- A restructuring proposal is placed before the sanctioning authority; proposals above [threshold to be supplied] go to the Board.
- Approved terms are documented, signed, and a copy given to the borrower.
- Asset classification and provisioning follow the applicable RBI norms. Restructuring does not change what we are required to recognise on our books, and we do not restructure in order to avoid recognition.
7. Conduct during recovery
Whether or not an account is restructured, the conduct standards in our Fair Practices Code apply without exception — no calling at odd hours, no intimidation, no approaching neighbours or relatives to apply pressure, no use of muscle power. A borrower in difficulty is still entitled to be treated with courtesy.
8. Grievances
A borrower dissatisfied with a decision under this policy may use our Grievance Redressal procedure, including escalation to the RBI Ombudsman.