New Delhi: To provide support to small businesses affected by the second coronavirus wave, banks have begun the process of restructuring loans up to 25 million in line with the Covid-19 aid measures announced by the Reserve Bank earlier this month. Many lending institutions have the approval of the board for the resolution framework and there are calls with eligible lenders. The Bank of India, for example, has sent messages to its eligible customers about their willingness to file debt review online.
‘In these difficult times, we offer you a helping hand by extending the relief according to the RBI Resolution Framework 2.0 of 5 May 2021. If you are under financial stress due to the Covid second wave, you can opt for the restructuring of your account, ”reads the message. Meanwhile, another public sector lender, Punjab & Sind Bank, said the debt recovery plan as set out by the RBI had been approved by the council. “We will make contact with our customers, also through BCs … we will get a good idea of how many customers want to use the next few days of the restructuring,” said S Krishnan, managing director of Punjab & Sind Bank.
The revival of the fresh Covid-19 golf has put many MSMEs, individuals and small businesses under stress. Taking into account the prevailing situation, the RBI Resolution Framework 2.0 has been announced including individuals and small businesses that can opt for exposure to up to 25 million for loan restructuring if they have not availed themselves of the previous scheme. In the case of those who took advantage of the restructuring of the loan under the previous scheme, the RBI allowed the banks and lending institutions to amend the plans and extend the moratorium to alleviate the potential tension.
“In the case of smaller businesses and MSMEs that were previously restructured, lending institutions are also allowed as a one-off measure to review the limits based on a revaluation of the working capital cycle, margins, etc.,” the RBI governor said. Shaktikanta said. Das said as he announced steps to address the impact of the second wave. It is a one-off restructuring scheme for loans under which the loan would remain standard despite the restructuring and that banks would not have to make additional provision in such cases.
This is the second restructuring scheme announced by the central bank in less than one year, with the first unveiled in August last year when the first Covid-19 Wave hit the Indian economy with an 8 percent contraction during the fiscal year ended March 2021.
Borrowers classified as ‘default’ on 31 March 2021 may be considered under Resolution Framework 2.0. Restructuring under the proposed framework can be called in until 30 September 2021 and must be implemented within 90 days of call.
Source: Telangana Today