(Corrects designation of Acharya in the 1st paragraph to deputy governor from governor)
MUMBAI, June 30 (Reuters) - Reserve Bank of India Deputy Governor Viral Acharya said on Friday it was “very reasonable” to ask banks to make provision for 50 percent of the amount of defaulted loans submitted under the country’s insolvency and bankruptcy code (IBC).
Acharya’s comments confirm local media reports that the central bank had asked lenders to set aside 50 percent of the defaulted loans.
“I think the provisions are very reasonable based on any historical recovery rates that banks even on secured debt have typically earned,” he told reporters on the sidelines of an event for the book launch of a former RBI Governor. (Reporting by Suvashree Dey Choudhury; Writing by Rafael Nam)