Which of the following statements best describes the term 'Schemes for Sustainable Structuring of Stressed Assets (S4A)', recently seen in the news?

Question

Question

This question was previously asked in

UPSC Civil Services (Prelims) General Studies Official Paper-I (Held In: 2017)

It is a procedure for considering ecological costs of developmental schemes formulated by the Government.
It is a scheme of RBI for reworking the financial structure of big corporate entities facing genuine difficulties.
It is a disinvestment plan of the Government regarding Central Public Sector Undertakings.
It is an important provision in 'The Insolvency and Bankruptcy Code' recently implemented by the Government.

Answer 1

The correct answer is It is a scheme of RBI for reworking the financial structure of big corporate entities facing genuine difficulties.

A new scheme called Sustainable Structuring of Stressed Assets (S4A) to tackle bad loans of big firms was unveiled by RBI.

The Reserve Bank of India (RBI), to put real assets back on track and to strengthen the lenders’ ability to deal with stressed assets, unveiled the scheme called Scheme for Sustainable Structuring of Stressed Assets (S4A) — for “reworking the financial structure” of big corporate entities “facing genuine difficulties”.
As per RBI notification about S4A, Scheme envisages bifurcation of the outstanding debt into sustainable debt and equity/quasi-equity instruments and determines the sustainable debt level for a stressed borrower.