Rehabilitation and Recovery
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Advanced Bank Management — CAIIB.
One-liners from this chapter
Free sample — 8 of 66 rapid-fire Q&A cards.
What is the primary objective of rehabilitation of a sick industrial unit?
The primary objective is to revive a viable but distressed unit by providing financial restructuring, managerial support, and operational improvements so it can resume normal functioning and repay its debts.
What is the minimum number of days a loan account must remain NPA before rehabilitation is considered?
Generally 90 days past due triggers NPA classification.
Under RBI guidelines, what is the definition of a 'sick' borrower account eligible for rehabilitation?
A borrower account is considered sick when it has remained a Non-Performing Asset (NPA) for at least six months and the unit has potential for revival if provided with timely support and restructuring.
What is the purpose of a 'moratorium period' granted during rehabilitation of a sick unit?
Temporary suspension of repayment obligations to allow recovery.
What is the role of the Joint Lenders' Forum (JLF) in stressed asset resolution?
The JLF is a consortium of lenders convened when a borrower's account shows signs of stress; it formulates a Corrective Action Plan (CAP) to resolve the stress through restructuring, change of management, or recovery proceedings.
What is the role of the Resolution Professional (RP) under IBC 2016?
Manages debtor's operations and prepares resolution plan during CIRP.
What is a Corrective Action Plan (CAP) under the RBI framework for stressed assets?
A CAP is a structured resolution plan prepared by the JLF outlining measures such as rectification, restructuring, or recovery to rehabilitate a stressed borrower account within a defined timeline.
What is the time limit for completing the Corporate Insolvency Resolution Process (CIRP) under IBC?
180 days, extendable by 90 days with NCLT approval.
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