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

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

Answer: B

Explanation

The S4A by RBI envisages determination of the sustainable debt level for a stressed borrower, and bifurcation of the outstanding debt into sustainable debt and equity/quasi-equity instruments which are expected to provide upside to the lenders when the borrower turns around.