- The Scheme for Sustainable Structuring of Stressed Assets (S4A) was introduced by the Reserve Bank of India (RBI) in June 2016. - It provided a framework for the resolution of large stressed accounts (non-performing assets) of ₹500 crore or more. - The scheme allowed for the bifurcation of a stressed asset into sustainable debt (debt which can be serviced by the current operations of the borrower) and unsustainable debt. The unsustainable debt could be converted into equity or other hybrid instruments, allowing banks to resolve large NPAs without having to classify the entire account as NPA immediately after restructuring, provided certain conditions were met.
Which of the following statements best describes the term ‘Scheme for Sustainable Structuring of Stressed Assets (S4A), recently seen in the news?
Asked in UPSC IAS 2017 · Topic: Money & Banking (Banking Sector Reforms: Basel Norms, Asset Quality Review (AQR), and NPA Management)
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Answer: B. It is a scheme of RBI for reworking the finan‐ cial structure of big corporate entities facing genuine difficulties.
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