Akansha Rathi and Associates
Quick Summary
The Reserve Bank of India released a bi-monthly monetary policy yesterday because of the ongoing pandemic COVID-19.
Here are the key points that were announced by the RBI Governor :
- Central Bank will form an expert committee headed by former ICICI Bank CEO KV Kamath to suggest ways in which the restructuring will be implemented
- Personal loans have also been included
- March 1 has been set as the reference date for the outstanding amount of debt for restructuring
- Accounts which were standard, but not in default for more than 30 as on March 1, 2020 will be considered
- The restructuring has to be invoked not later than December 31, 2020 and must be implemented within 90 days from the date of invocation & for corporate borrowers within 180 days.
- Resolution plans may inter alia include rescheduling of payments, conversion of any interest accrued, or to be accrued, into another credit facility, or, granting of moratorium, based on an assessment of income streams of the borrower, subject to a maximum of two years
- In case of corporate borrowers with multiple lending institutions, the resolution process shall be treated as invoked if lending institutions representing 75% by value of the total outstanding credit facilities (fund based as well non-fund based) , and not less than 60% of lending institutions by number agree to invoke the same & all transactions to be routed through an escrow account maintained with one of the lending institutions.
- Not available for exposures to financial sector entities as well as governments bodies
FAQ :
The Reserve Bank of India announced a one-time loan restructuring scheme for borrowers affected by the COVID-19 pandemic.
An expert committee headed by former ICICI Bank CEO KV Kamath will suggest ways to implement the restructuring.
Accounts that were standard and not in default for more than 30 days as on March 1, 2020, are considered eligible.
The restructuring must be invoked no later than December 31, 2020.
Resolution plans may include rescheduling payments, converting accrued interest into another credit facility, or granting a moratorium of up to two years.
No, the restructuring scheme is not available for exposures to financial sector entities or government bodies.
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