RBI tightens JLF rules, directs banks not to break any norms, threatens to impose penalties

RBI tightens JLF rules, directs banks not to break any norms, threatens (की धमकी) to impose penalties

The Reserve Bank of India (RBI) on Friday moved to make the joint lenders(उधारदाताओं) ’ forum (JLF) more effective, directing banks to not break any rules and to meet all deadlines. The regulator said any breach of rules would attract a monetary penalty(मौद्रिक जुर्माना). JLFs are meetings at which banks attempt to red-flag stress early and work to try and keep it in check by putting in place a corrective action plan (CAP). Although the mechanism has been place for some time now, decisions have been few and far between thanks to disagreements between lenders.

With a view to facilitating consensus(आम सहमति), the RBI lowered the threshold needed for implementing a CAP — decisions agreed to by a minimum of 60% of creditors by value and 50% of creditors by number will now be valid. Earlier, 75% of the lenders by value and 60% by number needed to sign off on a CAP.

Once a decision was taken, the RBI said, it would be binding on all the others and must be implemented without any additional conditionalities. If a lender wanted to exit, it could do so by resorting to the substitution option but if it failed to exit within the given time, it would need to go along with the decision taken.

Definitions of consensus आम सहमति

noun

general agreement.

a consensus of opinion among judges.

synonyms: agreement, harmony, concurrence, accord, unity, unanimity, solidarity, concord