Government and Reserve Bank of India have taken various measures to address the Twin Balance sheet problem relating to over leveraged companies and bad loans accumulation in banks. The Government has taken sector specific measures (Infrastructure, Power, Road, Textiles, Steel etc.) where incidence of NPA is high. The Insolvency and Bankruptcy Code (IBC) has been enacted and Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI) and the Recovery of Debts due to Banks and Financial Institutions (RDDBFI) Act have been amended to improve resolution / recovery of bank loans. Six new Debt Recovery Tribunals (DRTs) have been established for improving recovery. RBI has provided a number of tools in this regard – Corporate Debt Restructuring (CDR), Formation of Joint Lenders’ Forum (JLF), Flexible Structuring for long term project loans to Infrastructure and Core Industries (5/25 Scheme), Strategic Debt Restructuring Scheme (SDR) and Sustainable Structuring of Stressed Assets (S4A).

This was stated by Shri Santosh Kumar Gangwar, Minister of State in the Ministry of Finance in written reply to a question in Lok Sabha today.

Twin Balance Sheet reforms: strengthened insolvency framework and RBI restructuring tools to enhance loan resolution and recovery. Twin Balance Sheet problem from over-leveraged companies and mounting non-performing assets has been addressed through enactment of a strengthened insolvency framework and targeted amendments to recovery statutes, complemented by sector-specific interventions. Institutional and regulatory measures include additional Debt Recovery Tribunals and central bank tools such as Corporate Debt Restructuring, Joint Lenders' Forum, long term project loan structuring, Strategic Debt Restructuring and Sustainable Structuring of Stressed Assets to facilitate restructuring and recovery of bank loans.