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- RBI’s joint lenders’ forum (JLF) guidelines came into effect in 2014 after the central bank put a new framework in place to tackle stressed assets.
- JLFs were intended to recognize stressed assets early and come up with a corrective action plan (CAP) within 45 days.
- Upon agreement by a minimum of 75% of lenders by value and 60% of the lenders by number restructuring of the account may be carried out under the Corporate Debt Restructuring (CDR) Mechanism.
- RBI has asked banks to set up an empowered group (JLF-EG) which will be tasked to approve the restructuring package.
- Banks will have to implement the plan agreed upon without any additional conditions and there would be a monetary penalty on those who veer away from the decision.
