At present, there are no guidelines for banks that seek to arrive at a compromise on sticky accounts. The legal option is a long-drawn-out process, and the debt recovery tribunals (DRTs), too, are not in a position to provide speedy recourse as the tribunals have not been set up in every state, Kannan said.

Till now, banks have been arriving at settlements according to their own internally determined formula. The RBI has decided to offer banks a broad set of directives within which they can determine an approach best suited for the bank, Kannan added.