The central government and the RBI are taking the lessons of recent experience into account as they discuss remedial action with the states. To deal both with project paralysis as well as the unfair distribution of losses, RBI ended the forbearance accorded to restructured loans. Henceforth, restructured loans will be classified as non-performing loans.
However, RBI has made it easier to recognize and deal with distressed projects. In other words, while ending forbearance, we have introduced flexibility for those who recognize and deal with stressed assets. Consider some measures. First, RBI has created a database of loans over Rs.