Question 37 from UPSC CSE 2017 - Current
Affairs

Question

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

IASCODEX · Accepted Answer

Correct Option: B. It is a scheme of RBI for reworking the financial structure of big corporate entities facing genuine difficulties.

Strategy: Identify the sector by analyzing keywords in 'Scheme for Sustainable Structuring of Stressed Assets (S4A)'. The terms 'structuring' and 'stressed assets' point to financial restructuring for corporates, allowing for the elimination of unrelated options.

Key Info: The Scheme for Sustainable Structuring of Stressed Assets (S4A) was a framework introduced by the Reserve Bank of India (RBI) in June 2016 to resolve large corporate debt.

- **Objective:** Address large stressed corporate accounts in the banking sector.
- **Mechanism:** Banks could bifurcate a borrower's debt into sustainable and unsustainable portions to rework loan structures without immediate losses.
- **Eligibility:** Applied to viable projects facing genuine difficulty (not willful defaults) with corporate loans above INR 500 crore.
- **Context:** S4A was one of several resolution mechanisms, including SDR and CDR, and was separate from environmental, disinvestment, or IBC provisions.
- **Outcome:** The scheme was later withdrawn but marked a significant development in India's stressed asset resolution frameworks.

IASCODEX · Answer

Option A: It is a procedure for considering ecological costs of developmental schemes formulated by the Government.

IASCODEX · Answer

Option C: It is a disinvestment plan of the Government regarding Central Public Sector Undertakings.

IASCODEX · Answer

Option D: It is an important provision in 'The Insolvency and Bankruptcy Code' recently implemented by the Government.