The restructuring under the proposed framework can be invoked up to September 30, 2021, and shall have to be implemented within 90 days of invocation.
Reserve Bank of India (RBI) Governor Shaktikanta Das
The Reserve Bank of India (RBI) announced fresh restructuring resolutions for individuals, small businesses and Micro, Small and Medium Enterprises (MSME) borrowers who have an aggregate exposure of upto Rs 25 crores.
The borrowers who have not availed restructuring under any of the earlier restructuring frameworks (including under the Resolution Framework 1.0 dated August 6, 2020), and who were classified as ‘Standard’ as on March 31, 2021, shall be eligible to be considered under Restructuring Resolution Framework 2.0.
“Those availing resolution 1.0 can have residual tenure extended to two years. Lenders can review working capital sanction limits for those availing 1.0,” RBI Governor Shaktikanta Das said during the unscheduled announcement.
Further, the restructuring under the proposed framework can be invoked until September 30 and shall have to be implemented within 90 days of invocation.
“In respect of individual borrowers and small businesses who have availed restructuring of their loans under Resolution Framework 1.0, where the resolution plan permitted a moratorium of less than two years, lending institutions are being permitted to use this window to modify such plans to the extent of increasing the period of moratorium and/or extending the residual tenor up to a total of 2 years. Other conditions will remain the same,” RBI said.
The central bank earlier launched the one-time loan restructuring scheme, following a six-month loan moratorium, for all term loans, with a view to helping those stressed borrowers hit by the pandemic.
It added that, in respect of small businesses and MSMEs restructured earlier, lending institutions are also permitted – as a one-time measure – to review the working capital sanctioned limits, based on a reassessment of the working capital cycle, margins, etc.