Q64. Which of the following statements best describes the term ‘Scheme for Sustainable Structuring of Stressed Assets (S4A)’, 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.
The correct answer is Option 2.
- Sustainable Structuring of Stressed Assets (S4A)
- The RBI unveiled a new programme called Sustainable Structuring of Stressed Assets (S4A) to address large firms’ bad loans. Hence, Option 2 is correct.
- The Reserve Bank of India (RBI) unveiled the Scheme for Sustainable Structuring of Stressed Assets (S4A) — for “reworking the financial structure” of large corporate entities “facing genuine difficulties” — to put real assets back on track and strengthen lenders’ ability to deal with stressed assets.
- According to the RBI’s S4A notification, the Scheme envisions the bifurcation of outstanding debt into sustainable debt and equity/quasi-equity instruments, as well as determining the sustainable debt level for a stressed borrower.
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