MUMBAI, May 30 (Reuters) - The Reserve Bank of India tightened rules for restructuring of most types of assets to bring them in line with global practices, saying that existing “regulatory forbearance” will be removed from April 1, 2015.
Under the new rules, banks must set aside for provisioning 5 percent of the value of a loan that is newly restructured, from 2 percent previously, starting June 1.
Currently, Indian banks do not have to reclassify a performing asset as non-performing after it is restructured.
However, the central bank will not force banks to reclassify loans as non-performing in the event of project delays in the infrastructure and commercial real estate sectors. (Reporting by Suvashree Dey Choudhury; Editing by Tony Munroe)