{"id":4163,"date":"2020-03-28T22:11:01","date_gmt":"2020-03-28T16:41:01","guid":{"rendered":"http:\/\/yourcareerheights.com\/?p=4163"},"modified":"2020-03-28T22:11:03","modified_gmt":"2020-03-28T16:41:03","slug":"rbis-covid-19-regulatory-package","status":"publish","type":"post","link":"https:\/\/yourcareerheights.com\/?p=4163","title":{"rendered":"RBI’s COVID-19 \u2013 Regulatory Package"},"content":{"rendered":"
\n
\n\t

RBI has issued directions to all the financial institutions including all Banks, Cooperative Banks, NBFC's and other Financial Institutions under the \"COVID-19 Regulatory Package\". The various directions given are as under:<\/h3>\n

(i) Rescheduling of Payments \u2013 Term Loans and Working Capital Facilities<\/p>\n

2. In respect of all term loans (including agricultural term loans, retail and crop loans), all commercial banks (including regional rural banks, small finance banks and local area banks), co-operative banks, all-India Financial Institutions, and NBFCs (including housing finance companies) (\u201clending institutions\u201d) are permitted to grant a moratorium of three months on payment of all instalments1<\/a><\/sup>\u00a0falling due between March 1, 2020 and May 31, 2020. The repayment schedule for such loans as also the residual tenor, will be shifted across the board by three months after the moratorium period. Interest shall continue to accrue on the outstanding portion of the term loans during the moratorium period.<\/p>\n

3. In respect of working capital facilities sanctioned in the form of cash credit\/overdraft (\u201cCC\/OD\u201d), lending institutions are permitted to defer the recovery of interest applied in respect of all such facilities during the period from March 1, 2020 upto May 31, 2020 (\u201cdeferment\u201d). The accumulated accrued interest shall be recovered immediately after the completion of this period.<\/p>\n

(ii) Easing of Working Capital Financing<\/p>\n

4. In respect of working capital facilities sanctioned in the form of CC\/OD to borrowers facing stress on account of the economic fallout of the pandemic, lending institutions may recalculate the \u2018drawing power\u2019 by reducing the margins and\/or by reassessing the working capital cycle. This relief shall be available in respect of all such changes effected up to May 31, 2020 and shall be contingent on the lending institutions satisfying themselves that the same is necessitated on account of the economic fallout from COVID-19. Further, accounts provided relief under these instructions shall be subject to subsequent supervisory review with regard to their justifiability on account of the economic fallout from COVID-19.<\/p>\n

Classification as Special Mention Account (SMA) and Non-Performing Asset (NPA)<\/p>\n

5. Since the moratorium\/deferment\/recalculation of the \u2018drawing power\u2019 is being provided specifically to enable the borrowers to tide over economic fallout from COVID-19, the same will not be treated as concession or change in terms and conditions of loan agreements due to financial difficulty of the borrower under paragraph 2 of the Annex to the Reserve Bank of India (Prudential Framework for Resolution of Stressed Assets) Directions, 2019 dated June 7, 2019 (\u201cPrudential Framework\u201d). Consequently, such a measure, by itself, shall not result in asset classification downgrade.<\/p>\n

6. The asset classification of term loans which are granted relief as per paragraph 2 shall be determined on the basis of revised due dates and the revised repayment schedule. Similarly, working capital facilities where relief is provided as per paragraph 3 above, the SMA and the out of order status shall be evaluated considering the application of accumulated interest immediately after the completion of the deferment period as well as the revised terms, as permitted in terms of paragraph 4 above.<\/p>\n

7. The rescheduling of payments, including interest, will not qualify as a default for the purposes of supervisory reporting and reporting to Credit Information Companies (CICs) by the lending institutions. CICs shall ensure that the actions taken by lending institutions pursuant to the above announcements do not adversely impact the credit history of the beneficiaries.<\/p>\n

Other Conditions<\/p>\n

8. Lending institutions shall frame Board approved polices for providing the above-mentioned reliefs to all eligible borrowers,\u00a0inter alia<\/em>, including the objective criteria for considering reliefs under paragraph 4 above and disclosed in public domain.<\/p>\n

9. Wherever the exposure of a lending institution to a borrower is \u20b9 5 crore or above as on March 1, 2020, the bank shall develop an MIS on the reliefs provided to its borrowers which shall\u00a0inter alia<\/em>\u00a0include borrower-wise and credit-facility wise information regarding the nature and amount of relief granted.<\/p>\n

10. The instructions in this circular come into force with immediate effect. The Board of Directors and the key management personnel of the lending institutions shall ensure that the above instructions are properly communicated down the line in their respective organisations, and clear instructions are issued to their staff regarding their implementation.<\/p>\n

Source: RBI circular no.RBI\/2019-20\/186
\nDOR.No.BP.BC.47\/21.04.048\/2019-20\u00a0 \u00a0dt. March 27, 2020<\/p>\n<\/div>\n<\/div><\/div><\/div><\/div><\/div><\/div>","protected":false},"excerpt":{"rendered":"

RBI has issued directions to all the financing agencies including all Banks, Financial Institutions, NBFC’s & Cooperative Banks etc under COVIC-19 Regulatory Package.<\/p>\n","protected":false},"author":1,"featured_media":2375,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[38,137,854,860,548,524,45],"tags":[861,40],"class_list":["post-4163","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking","category-basel-iii","category-covid-19","category-covid-19-regulatory-package","category-developmental-and-regulatory-policy","category-npa-banking","category-rbi","tag-covid-19-regulatory-package","tag-rbi"],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/yourcareerheights.com\/wp-content\/uploads\/2017\/05\/RBI2.jpg?fit=621%2C414&ssl=1","jetpack_sharing_enabled":true,"jetpack-related-posts":[],"jetpack_likes_enabled":true,"_links":{"self":[{"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=\/wp\/v2\/posts\/4163","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=4163"}],"version-history":[{"count":1,"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=\/wp\/v2\/posts\/4163\/revisions"}],"predecessor-version":[{"id":4164,"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=\/wp\/v2\/posts\/4163\/revisions\/4164"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=\/wp\/v2\/media\/2375"}],"wp:attachment":[{"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=4163"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=4163"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=4163"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}