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COVID-19 stress: RBI allows one-time corporate loan restructuring

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The Reserve Bank of India in today's MPC meeting has decided to permit one-time restructuring of corporate loans. RBI Governor Shaktikanta Das said a window under the June 7 stressed asset resolution framework will be provided which will enable lenders to implement a resolution plan, without a change in ownership.

The Reserve Bank of India in today's MPC meeting has decided to permit one-time restructuring of corporate loans.
The details of this exercise will be spelt out by a committee headed by veteran banker KV Kamath.
RBI Governor Shaktikanta Das said a window under the June 7 stressed asset resolution framework will be provided which will enable lenders to implement a resolution plan, without a change in ownership.
"Such a restructuring will not invite a downgrade in the asset classification as it does currently. Stressed MSME borrowers will also be allowed to restructure their debt provided they were classified as standard on March 31," added RBI Governor.
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"Lenders shall keep additional provisions of 10 percent on the post-resolution debt. Resolution plan may be invoked anytime till December 31, 2020, and shall have to be implemented within 180 days from the date of invocation," added Das further.
Another important point to note is all schemes will have to clearly be defined by boundary conditions and specific binding covenants. They must also have independent validation and strict post-implementation performance monitoring.
He also said that the regulatory approach has to be dynamic, proactive and balanced. The RBI will ensure that necessary safeguards are in place to maintain financial stability, said Das in his address.
 

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CompanyPriceChng%Chng
Hindalco458.10 41.80 10.04
Tata Steel1,458.60 93.60 6.86
Bajaj Finserv14,599.05 628.50 4.50
SBI441.55 16.05 3.77
JSW Steel748.40 26.70 3.70
CompanyPriceChng%Chng
Tata Steel1,459.00 93.85 6.87
Bajaj Finserv14,590.45 625.20 4.48
SBI441.75 16.30 3.83
HCL Tech1,007.60 24.95 2.54
Sun Pharma703.25 15.70 2.28

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