New Delhi, April 17 (SocialNews.XYZ) Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday announced a 90-day extension for the resolution period for large stressed assets which have not been resolved within the 210 day deadline as per the central bank's June 7, 2019 order.
The 90-day extension of inter-bank resolution of stressed assets would be available only to accounts which were within the review period as on March 1, 2020. In this case, the period from March 1, 2020 to May 31, 2020 shall be excluded from the calculation of the 30-day timeline for the review period. In respect of all such accounts, the residual review period shall resume from June 1, 2020, upon expiry of which the lenders shall have the usual 180 days for resolution.
Also, in respect of accounts where the review period was over, but the 180-day resolution period had not expired as on March 1, 2020, the timeline for resolution shall get extended by 90 days from the date on which the 180-day period was originally set to expire.
Consequently, the requirement of making additional provisions specified in the Prudential Framework for bad assets will get triggered as and when the extended resolution period expires.
In respect of all other accounts, the provisions of the Prudential Framework shall be in force without any modifications, the RBI said in a statement.
Announcing a slew of liquidity and regulatory easing measures for financial institutions to tide over the coronavirus crisis, the RBI Governor noted that under RBI's prudential framework of resolution of stressed assets dated June 7, 2019, in the case of large accounts under default, Scheduled Commercial Banks, AIFIs, NBFC-ND-SIs and NBFC-D are currently required to hold an additional provision of 20 per cent if a resolution plan has not been implemented within 210 days from the date of such default.
On March 27, the RBI had permitted lending institutions to grant a moratorium of three months on payment of current dues falling between March 1 and May 31, 2020.
Source: IANS
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