Only loan accounts without default as of 1 March can apply for restructuring, clarifies RBI

The Indian central bank also clarified that all farm credit exposures, including from NBFCs, can be recast under the pandemic-related resolution framework issued in August, but loans to allied activities are excluded The Reserve Bank of India has clarified that loans which have remained standard without any defaults as of March 1, 2020, will be eligible for restructuring under the pandemic-related resolution framework issued in August. In clarifications issued late last night to borrowers as well as lenders about the August 6 circular, RBI said a loan account that was due for more than 30 days as on March 1, 2020, but subsequently got regularised, will not be ineligible for resolution under the COVID-19 resolution framework. Similarly, the regulator said restructuring of under-implementation project loans involving deferment of date of commencement of operations are excluded from the scope of resolution framework and that such accounts will continue to be governed by the February 7, 2020, and the other relevant instructions as applicable to specific category of lending institutions. On whether the list of financial parameters prescribed by the expert committee and notified by RBI on September 7, 2020, are applicable only to borrowers having exposure of over Rs 1,500 crore, it said the September 7 instructions are applicable to all borrowers whose resolution is being undertaken as per the August 6, 2020, on resolution framework, the RBI said.