Therefore, early in the process, the Reserve Bank set about giving banks the tools to deal with stressed loans, including information about the degree of the borrower’s collective indebtedness from the system and more effective ways to reduce the project’s financial stress such as the Joint Lender’s Forum, the Strategic Debt Restructuring mechanism, and the 5/25 mechanism.
In a way, the RBI has been trying to create a functioning resolution process in a situation where the existing bankruptcy system functions poorly. Asset quality review Of course, every new tool can be used to deal with a problem, but also perversely, to avoid it.