The Reserve Bank of India (RBI) has informed that five complaints /representations regarding irregularities in restructuring of loans in public sector banks in the country have been received. One representation is from Institute of Cost & Works Accountants of India (ICWAI), a complaint from a Member of Parliament and three complaints are from other persons.

A Working Group (WG), constituted by RBI to review the Prudential guidelines on Restructuring of Advances, had examined the issues related to misuse of restructuring mechanism and made various recommendations for rationalizing and tightening the existing guidelines. Taking into account the recommendations of WG and comments received from various stakeholders, a detailed guideline on restructuring of advances was issued by RBI on May 30, 2013.

This was stated by Shri Namo Narain Meena, MoS in the Ministry of Finance in written reply to a question in the Rajya Sabha.

Loan restructuring safeguards: RBI tightened prudential guidelines after Working Group review to curb misuse and strengthen oversight. Receipt of complaints about irregularities in loan restructuring at public sector banks led a Reserve Bank Working Group to review prudential guidelines and recommend tightening. Taking those recommendations and stakeholder comments into account, the Reserve Bank issued detailed guidelines on restructuring of advances on May 30, 2013 to rationalize existing rules and address misuse.