RBI Issues Framework for Compromise Settlements and Technical Write-offs

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  • Last Updated on 12 June, 2023

framework for compromise settlements and technical write-offs

Circular No. RBI/2023-24/40 DOR.STR.REC.20/21.04.048/2023-24, Dated 08.06.2023

RBI has introduced a framework for compromise settlements and technical write-offs. Regulated entities must establish board-approved policies for such settlements. Compromise settlements involve fully settling borrower claims in cash, potentially requiring REs to sacrifice some amount due with a corresponding waiver of claims against the borrower. Technical write-off refers to when NPA are written off for accounting purposes without waiving claims against the borrower or hindering future recovery.

Click Here To Read The Full Circular

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