RBI makes loan recasts difficult for firms, banks

The Reserve Bank of India (RBI) tightened the rules for corporate debt recasts on Thursday, seeking to address the risk of restructured loans turning bad as the economy struggles for recovery from its slowest pace of growth in a decade. Banks should set aside more money to cover restructured loans and the promoters of companies seeking a debt recast have to be made personally liable for compensation for losses incurred by lenders engaged in such an exercise, RBI said.

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