Background
The Reserve Bank of India, on 5th March, 2017, came out with a notification[1] (Notification) to tweak the norms for constitution and operation of Joint Lender’s Forum (JLF) which was originally introduced in February, 2014.
To do recap, the original framework requires formation of joint lenders’ forum upon an account becoming SMA-2 to devise a corrective action plan (CAP) to revive it. Under the CAP, the lenders have three options – first, rectification of the account without changing any terms of the financial arrangement, second, restructuring of the account which involves change in the terms and conditions of the financial arrangement and lastly, if the other two fails, then the lenders may decide to initiate recovery proceedings against the borrower. Read more →