Question
Which of the following statements best describes the- term ‘Scheme for Sustainable Structuring of Stressed Assets (S4(a)', recently seen in the news?
(a) It is a procedure for considering ecological costs of developmental schemes formulated by the Government.
(b) It is a scheme of RBI for reworking the financial structure of big corporate entities facing genuine difficulties.
(c) It is a disinvestment plan of the Government regarding Central Public Sector Undertakings.
(d) It is an important provision in ‘The Insolvency and Bankruptcy Code' recently implemented by the Government.
Answer:
B
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Explanation:
The Scheme for Sustainable Structuring of Stressed Assets (S4A) was introduced by the Reserve Bank of India (RBI) in 2016 as a mechanism to help restructure the financial obligations of large corporate borrowers facing genuine difficulties. It provides a framework for banks to restructure the stressed assets of these borrowers in a more sustainable manner, with the aim of improving their viability and reducing the risk of default. The scheme allows for the bifurcation of the outstanding debt into sustainable debt and equity/quasi-equity instruments, providing a more flexible and realistic approach to resolving stressed assets.