The second of these initiatives is a comprehensive review of banks’ practices related to strategy, governance and risk management – the thematic review on C&E risks, which is a key topic of the session today. Two years after we launched the supervisory guide on C&E risks, we are conducting this thematic review to follow up on the self-assessment exercise conducted last year.
I don’t know why restructuring a loan which is under short term stress should not be done. What we are saying is that, the banks must acknowledge the problem, admit that the account is facing stress as of now, but is expected to recover in future. Hence, make a small provision and reverse it when the account becomes satisfactory and starts paying.