Union Minister for Finance Nirmala Sitharaman will meet top management of Scheduled Commercial Banks (SCBs) and Non-Banking Financial Companies (NBFCs) on September 3 to review the implementation of the resolution framework for COVID-19 related stress in bank loans.
”The review will focus on enabling businesses and households to avail of the revival framework on the basis of viability, necessary steps like finalising bank policies and identifying borrowers, and discussing issues that require addressing for smooth and speedy implementation, ”a Finance Ministry statement said.
After the Monetary Policy Committee (MPC) meet on August 21, Reserve Bank of India (RBI) Governor Shaktikanta Das announced the Resolution Framework for COVID-19 related stress.
“RBI formed the “COVID-19-related resolution framework” after taking into consideration financial health of banks as well as depositors. Businesses are in a lot of stress due to COVID-19 and if they fail, it will lead to financial instability. However, if businesses are saved, they will repay loans and, subsequently, save jobs,” he said.
“Bank moratorium was a temporary solution to respond to coronavirus lockdown but resolution framework is a permanent solution,” he said, adding that resolution has replaced moratorium.