Mumbai, Aug 6 (SocialNews.XYZ) The Reserve Bank of India (RBI) has extended deadlines for meeting certain thresholds prescribed under the Covid Resolution Framework 1.0.
The resolution plans implemented under the Resolution Framework for COVID-19 related stress announced on August 6, 2020, are required to meet the sector specific thresholds notified in respect of five financial parameters, four of which are related to the operational performance of the borrowing entity.
The total debt to EBIDTA ratio, Current Ratio, Debt Service Coverage Ratio and Average Debt Service Coverage Ratio, were to be met by 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," RBI Governor Shaktikanta Das said.
As regards the parameter Total Outside Liabilities/Adjusted Total Net Worth (TOL/ATNW), this ratio reflects the revised capital structure (debt-equity mix) as required under the implementation conditions for the resolution framework and was expected to be crystallised upfront as part of the resolution plan.
The date for achieving the same remains unchanged -- March 31, 2022.
A circular to this effect, modifying the previous instructions dated September 7, 2020, will be issued shortly, RBI said.
Source: IANS
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