RBI permitted One-Time restructuring of credits due to monetary pressure

The Reserve Bank of India (RBI) has permitted a one-time restructuring of credits without arranging them as NPAs to help organizations and people to deal with the monetary pressure brought about by the COVID 19 pandemic.

Shaktikanta Das, Governor, RBI said, the national bank will likewise create a master board headed by previous ICICI Bank Chief KV Kamath to propose manners by which the restructuring will be actualized.

The board of trustees likely to restructure credits of Rs 1,500 crores or more. The RBI has decided to give a window to the restructuring of credits without downsizing them, as indicated by June 7 2019 circular.

The resolution plan may also include sanctioning of additional credit facilities to address the financial stress of the borrower on account of Covid19, even if there is no renegotiation of existing debt. The lending institutions may allow extension of the residual tenor of the loan, with or without payment moratorium, by a period not more than two years, RBI said.

 

Credit restructuring may be done by converting a portion of the debt into equity or other marketable, non-convertible debt securities issued by the borrower, provided the amortization schedule and the coupon carried by such debt securities are similar to the terms of the debt held on the books of the lending institutions, post-implementation of the resolution plan.

The restructuring may be done by converting a portion of the debt into equity or other marketable, non-convertible debt securities issued by the borrower, provided the amortization schedule and the coupon carried by such debt securities are similar to the terms of the debt held on the books of the lending institutions, post-implementation of the resolution plan.

On the off chance that the loaning establishments convert any part of the obligation into some other security, the equivalent will altogether be esteemed at Rs 1. For accounts where the total introduction of the loaning foundations at the hour of conjuring of the goal procedure is Rs.100 crore or more, a necessary free credit assessment (ICE) by anyone FICO assessment office (CRA) will be required.

The goal plan will additionally give that in accounts including consortium or various banking courses of action, post-execution of the arrangement.