NEW DELHI: A month after it announced a loan restructuring plan to help relieve Covid stress on industry, Reserve Bank of India on Monday released the K V Kamath panel’s report suggesting financial parameters for 26 pandemic-hit sectors. RBI said it has broadly accepted the panel’s suggestions.
According to the report, lenders must mandatorily consider total outstanding liabilities/adjusted tangible net worth, total debt/Ebitda, current ratio, debt service coverage ratio, and average debt service coverage ratio while finalising loan resolution plans.
Only those companies whose loans accounts are in default for not more than 30 days as on March 1, 2020 will be eligible for one-time restructuring.
RBI said the panel will vet resolution plans for all accounts where the exposure is more than Rs 1,500 crore.
For sectors where ratios have not been specified, lenders can make their own assessment.
The central bank said the resolution framework needs to be invoked by December 31 this year. Plus, the plan must be implemented within 180 days from the date of invocation.
RBI had on August 7 constituted the panel led by veteran banker Kamath to suggest financial parameters to be factored in while offering resolution for Covid19-related economic stress.
While banks are yet to ascertain the amount that will be restructured, India Ratings pegs the restructuring quantum from the corporate sector in FY21 at Rs 3.3-6.3 lakh crore.
The chosen ones
Power; construction; iron and steel manufacturing; roads; real estate; wholesale trading; textiles; chemicals; consumer durables/FMCG; non-ferrous metals; pharma manufacturing; logistics; gems and jewellery; cement; hotels, restaurants, tourism; mining; plastic products manufacturing; auto manufacturing; auto components; auto dealership; aviation; sugar; port and port services; shipping; building materials; and corporate retail outlets