So if a loan is identified as more than 60 days overdue, all lenders to the borrower have to come together in a Joint Lenders’ Forum (JLF) to see how the underlying problems can be fixed. The JLF has to follow strict timelines, failing which the project loans’ classification will be downgraded.
On the other hand, if the timelines are met, the deterioration in loan classification is halted. Furthermore, by bringing the banks and NBFCs into one forum, RBI has made it easier for the promoter and the creditors to reach a consensus on actions, even while making it harder for the promoter to play one creditor off against another.