What is S4A?

Scheme for Sustainable Structuring of Stressed Assets also known as S4A Scheme was launched on 13th June 2016 by the Reserve Bank of India as an initiative to address and resolve the debt issues of the corporate sector along with strengthening the ability of the lender to deal with stressed assets.

What is deep restructuring?

Under deep restructuring, banks will convert a portion of debt into equity and extend the repayment period for the rest of the loan. Under the strategic debt restructuring (SDR) scheme, majority of the accounts converted into equity had turned non-performing and burdened banks with additional capital.

What are the features of SDR?

The following are the salient features of SDRs:

• Additional Reserve Asset: ADVERTISEMENTS:
• Cheque-Book Currency: In the physical sense, SDRs are a cheque-book currency and are created with the strokes of pen.
• Transferable Asset:
• Backing of SDRs:
• Basis of SDRs:
• Allocation of SDRs:
• Special Drawing Account:
• Paper Gold:

What is RBI’s ‘scheme for sustainable structuring of stressed assets’?

The newly announced ‘Scheme for Sustainable Structuring of Stressed Assets’ (S4A) by RBI is outlined to tackle the ‘problem loans’ of large projects at a sufficiently early stage and protect the interest of lenders.

What is the difference between SDR and S4A scheme?

Whereas in the case of SDR, the promoter is delinked and ownership is changed. Similarly, under the S4A Scheme, the lenders also have an option of holding optionally convertible debentures instead of equity, which might be more preferred option. But in the case of SDR only equity holding is allowed.

What is S4A scheme and how to apply it?

S4A stands for Scheme for Sustainable Structuring of Stressed Assets. This is a scheme introduced by RBI to tackle the NPA problem. Writing off loans for huge accounts can dent the bank’s balance sheet. So, at least a portion of such huge accounts should be recovered efficiently There are three conditions to be satisfied for S4A to be implemented.

What is S4A scheme for sustainable structuring of stressed assets?

The Scheme for Sustainable Structuring of Stressed Assets was launched by the RBI to address the large stressed assets of the corporate sector. The main aims of the S4A scheme are discussed below: The scheme aims to provide financial restructuring of large debted projects by allowing the bank’s lender in acquiring equity of the stressed project.