Cooperative banks will soon be able to do compromise settlements, write-offs on NPAs: Shaktikanta Das

Reserve Bank Governor Shaktikanta Das said cooperative lenders will soon be able to do technical write-offs and execute compromise settlements with defaulting borrowers. RBI has decided to widen the scope of the framework for resolution of stressed assets, under which all the regulated entities including cooperative lenders will now be able to execute “compromise settlements and technical write-offs” to resolve non-performing assets, Das said.

Till now, this avenue for dead asset resolutions was available only with scheduled commercial banks and select non-bank finance companies, Das said, adding that comprehensive guidelines on the same will be released soon.

It can be noted that the cooperative lending sector frequently makes headlines for lack of governance practices and conflicts of interest.