The target date for achieving the financial parameters under the Covid resolution framework 1.0 has been now deferred to October 1, 2022. The earlier deadline was March 31, 2022.
“Recognising the adverse impact of second wave of COVID-19 on revival of businesses, and the difficulty it may pose in meeting the operational parameters, it has been decided to defer the target date for meeting the specified thresholds in respect of the above parameters to October 1, 2022,” the RBI said.
The resolution plans implemented under the Resolution Framework for COVID-19 related stress announced on August 6, 2020 are required to meet five financial parameters, four of which are related to the operational performance of the borrowing entity.
These include total debt to EBIDTA, current ratio, debt service coverage ratio, and average debt service coverage ratio. The regulator has relaxed deadlines to meet the thresholds for the four operational metrics.
To give relief to borrowers affected by the pandemic the regulator set-up a committee under veteran banker KV Kamath to define one-time recast framework. The Kamath committee defined recast thresholds for 26 stressed sectors. Banks are required to make 10% provisioning on all loans recast.
For all the latest Business News Click Here
For the latest news and updates, follow us on Google News.
