Finance Minister tells banks to put in a loan restructuring scheme by September 15

Finance Minister Nirmala Sitharaman told banks in a meeting on Thursday to put in place a loan restructuring scheme for rescuing all viable business units affected by the COVID-19 pandemic.

Finance Minister Nirmala Sitharaman told banks in a meeting on Thursday to put in place a loan restructuring scheme for rescuing all viable business units affected by the COVID-19 pandemic by September 15.

“During her interaction, the Finance Minister focused on lenders immediately putting in place board-approved policy for resolution, identifying eligible borrowers and reaching out to them and quick implementation of a sustained resolution plan by lenders for revival of every viable business,” the finance ministry said in a statement.

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The meeting was held with the chief executives of all scheduled commercial banks and non-banking financial companies to “review their state of preparedness for implementation of the loans resolution framework for COVID-19 related stress.”

The FM stressed that banks should keep in mind the COVID-19 related distress of borrowers which should not come in the way of assessing their credit-worthiness at the time of giving loans.

“During the meeting, Sitharaman impressed upon the lenders that as and when moratorium on loan repayments is lifted, borrowers must be given support and COvid-19 related distress must not impact the lenders’ assessment of their creditworthiness,” the finance ministry said.

The banks were told to put in place FAQs (frequently asked questions) on the debt restructuring on their websites in multiple languages.

“The lenders assured that they are ready with their resolution policies, have started the process of identifying and reaching out to eligible borrowers, and that they will comply with the timelines stipulated by the Reserve Bank of India (RBI),” the ministry added.