FM TO MEET BANKERS ON SEP 3 TO RESOLVE LOANS STRESSED DUE TO COVID

NEW DELHI: Finance minister Nirmala Sitharaman will meet top officials of scheduled commercial banks and non-banking financial companies (NBFCs) on September 3 to review the implementation of a resolution plan for loans stressed due to the coronavirus pandemic.

“The review will focus on enabling businesses and households to avail 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,” the finance ministry said in a statement on Sunday. This meeting will happen ahead of the KV Kamath-led panel’s recommendations on the eligibility parameters for restructuring of loans hit by the Covid-19 crisis.

Earlier this month, RBI governor Shaktikanta Das had said that a resolution framework for all Covid-19 related stressed accounts will be finalised by September 6. Restructuring some loans will support economic recovery and help businesses tide through the crisis.

While the Kamath committee recommendations are expected to focus on corporate loan portfolio, bankers are worried about the unsecured retail loan portfolios once the moratorium on debt repayments ends on Monday, Mint reported on Saturday. SBI chairman Rajnish Kumar had also said that the bank is readying to deal with a higher volume of personal loan requests after the end of the moratorium. Kumar said he does not expect many debt recast requests from large companies as most large stressed assets have gone through several rounds of clean-up.

Meanwhile, banks have also started an exercise to identify borrowers eligible for one-time debt restructuring.

In March, RBI had allowed a moratorium on the repayment of term loans to provide relief to borrowers for three months, which was further extended by another three months.