The Reserve Bank of India (RBI) has recently (vide the RBI (Transfer of Loan Exposures) Directions, 2021 dated September 24, 2021 replaced the existing instructions on the matter of sale/transfer of loan exposures by lending institutions. The RBI directions, inter- alia, permit transfer of loan exposures to any class of entities that are under the regulatory purview of any financial sector regulator in India [including International Financial Services Centres Authority (IFSCA)], subject to certain conditions. The RBI directions also call for the respective financial regulator to put in place a framework for this purpose in consultation with RBI.
IFSCA has set up a committee of experts to examine and recommend measures to create such a framework for transfer of stressed loans from domestic lenders to permitted financial institutions in IFSC. Shri G. Padmanabhan, Former Executive Director, Reserve Bank of India, shall be chairing the committee which will also include representative from Law firm and other market participants possessing expertise in Banking and Legal issues.
The Committee has been mandated to examine the provisions of the RBI directions pertaining to transfer of stressed loans by lending institutions to entities in IFSCA, identify areas/issues of the directions which require further clarification from RBI, suggest both the contents of the framework to be put in place by IFSCA to enable such transfers and amendments/additions to the RBI directions to make it easier to effect such transfers. The Committee shall submit its report to the Chairperson, IFSCA, by one month from the date of its first meeting.
The Authority also seeks inputs from interested parties with expertise in this domain. Such inputs, in the form of comments, recommendations etc., may be forwarded by email to [email protected] and [email protected]. Persons who wish to make presentations to the committee may also send their request to the given email id.