The aforesaid moratorium ended on 31st August 2020. To further ease the financial difficulties of the borrowers and keeping the Covid-19 affected borrowers outside the ambit of Non-Performing Assets (“NPA”), the RBI introduced a onetime window by issuing a circular on Resolution Framework for COVID-19 related stress dated 6th August 2020 (the “Covid Framework”).
Covid Framework
Under the Covid Framework, the lending institutions have been allowed to restructure a loan in respect of corporate exposures and personal loans which are under stress due to COVID-19. Banks are allowed to keep the asset standard even if there is no change of ownership.
1 Date on which both the borrower and lending institution have agreed to proceed with a resolution plan under the Covid Framework. If there are multiple lenders to the borrower, the resolution process shall be treated as invoked if lenders representing 75 percent by value of the total outstanding credit facilities (fund based as well non-fund based), and not less than 60 percent of lenders by number agree to invoke the same.
Supreme Court in Action
1) Several writ petitions were filled before the Supreme Court of India (“SC”) since the beginning of the lockdown in March 2020, challenging various measures announced by the RBI to mitigate the immediate impact on various sectors in the wake of Covid-19.
This story is from the December 2020 edition of BANKING FINANCE.
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This story is from the December 2020 edition of BANKING FINANCE.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
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