Reserve Bank of India (RBI) Governor Shaktikanta Das on Thursday, during the Monetary Policy Committee press conference, made a big announcement pertaining to restructuring of loans of corporate, individual borrowers. RBI has allowed lenders to provide window to restructure loans of corporate, individual borrowers to ease COVID-19 impact.
RBI Governor Shaktikanta Das said, “The disruptions caused by COVID-19 have led to heightened financial stress for borrowers across the board. A large number of firms that otherwise maintain a good track record under existing promoters face the challenge of their debt burden becoming disproportionate, relative to their cash flow generation abilities. This can potentially impact their long-term viability and pose significant financial stability risks if it becomes widespread.”
Further, Das said, “Accordingly, it has been decided to provide a window under the June 7th Prudential Framework to enable lenders to implement a resolution plan in respect