Background:

Asset quality in banks has important implications for the stability of the overall financial system. Management of Stressed Assets has always been a critical component of the credit function in banks, following implementation of Income Recognition and Asset Classification norms. There has been continuous regulatory emphasis on an effective stressed assets management framework in banks with focus on early warning signals and prevention of NPAs, including prompt restructuring in the case of all viable accounts. Despite perceptible improvement in the overall credit culture, with decline in the Gross NPA ratio of Scheduled Commercial Banks to a seven-year low of 5.0 % (as on Sept 2022) and the net NPA (NNPA) ratio to a ten-year low of 1.3%, several unresolved issues continue to plague timely resolution of stressed assets.

Enactment of the Insolvency and Bankruptcy Code (IBC) was a paradigm shift in the efforts for resolution of stressed assets in the financial system, facilitating a collective mechanism for resolution of stressed assets and with a view to preserve the economic value of the assets. At the same time, operationalizing of IBC has generated new challenges which need to be addressed by all stakeholders.

Objective:

In this program, the broad framework of stressed assets management and resolution with focus on IBC will be deliberated upon with insights into the lingering issues faced by financial intermediaries.  Discussion of the way forward in making the insolvency process a more effective tool for resolution of stressed assets for all stakeholders will enrich the understanding of participants.  It will also provide a platform for peer level discussion and interaction with the regulator.

Program Highlights:

The program will deal with the following:

• NPAs & Stressed Assets Management in Banks
• IBC and its evolving journey: way forward
• Issues related to Group Insolvency transactions in IBC
• Insolvency and post resolution challenges