FM to banks: Roll out resolution schemes by Sep 15 for Covid-related stress
New Delhi, Sep 3 (IANS) Finance Minister Nirmala Sitharaman on Thursday directed banks to roll out resolution schemes for Covid-related stress by September 15.
New Delhi, Sep 3 (IANS) Finance Minister Nirmala Sitharaman on Thursday directed banks to roll out resolution schemes for Covid-related stress by September 15.
During her interaction with the heads of scheduled commercial banks and NBFCs through a video conference, Sitharaman focused on lenders immediately putting in place board-approved policy for resolution, identifying eligible borrowers and reaching out to them, said an official statement.
She also called for quick implementation of a sustained resolution plan by lenders for revival of every viable business.
Sitharaman told the lenders that as and when moratorium on loan repayments is lifted, borrowers must be given support and Covid-19 related distress must not impact the lenders’ assessment of their credit-worthiness.
Further, she also called for a sustained media campaign to create awareness among the borrowers for the resolution scheme. She advised lenders to ensure that regularly updated FAQs on the resolution framework are uploaded on their websites in Hindi, English and regional languages, and also circulated to their offices and branches.
“The lenders assured that they are ready with their resolution policies, and have started the process of identifying and reaching out to eligible borrowers, and that they will comply with the timelines stipulated by the Reserve Bank of India (RBI),” said the Finance Ministry statement.
The ministry said that it has also been engaging with the RBI to ensure that the lenders are assisted by the central bank in the resolution process.
As the pandemic has led to severe economic stress across sectors, the RBI in August announced to provide a resolution framework to enable the lenders to implement a resolution plan, in respect of eligible corporate borrowers without change in ownership while continuing the account status as standard, subject to specified conditions.
During the virtual meet on Thursday, the Finance Minister also reviewed the progress made by various lenders under ECLGS, PCGS 2.0 and subordinate debt schemes announced as part of the ‘Aatmanirbhar Bharat Abhiyaan’, and advised lenders to try and extend the maximum possible relief to borrowers before the festive season.
As per the government, an amount of Rs 1.58 lakh crore has been sanctioned as on August 31, under ECLGS, out of which more than Rs 1.11 lakh crore has been disbursed. Under PCGS 2.0, bonds or commercial papers of Rs 25,055.5 crore have been approved for purchase by public sector banks so far, out of which Rs 13,318.5 crore amounting to more than 53 per cent of the portfolio pertains to bonds or commercial papers rated below ‘AA-‘.
–IANS
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