IFSCA sets up committee for creating Framework for transfer of stressed loans from domestic lenders to financial institutions in IFSC
New Delhi: The International Financial Services Centres Authority (IFSCA) has set up a committee of experts to examine and recommend measures to create such a framework for transfer of stressed loans from domestic lenders to permitted financial institutions at IFSC in Gujarat’s Gift city.
G. Padmanabhan, former Executive Director, Reserve Bank of India (RBI), would be chairing the committee which will also include representative from law firm and other market participants possessing expertise in banking and legal issues.
“The Committee shall submit its report to the Chairperson, IFSCA, by one month from the date of its first meeting,” an official statement said.
The RBI recently replaced the existing instructions on the matter of sale/transfer of loan exposures by lending institutions. The RBI directions permit transfer of loan exposures to any class of entities that are under the regulatory purview of any financial sector regulator in India including IFSCA subject to certain conditions.
The RBI directions also call for the respective financial regulator to put in place a framework for this purpose in consultation with RBI.
The Committee constituted by IFSCA has been mandated to examine the provisions of the RBI directions pertaining to transfer of stressed loans by lending institutions to entities in IFSCA.
