FM Sitharaman asks banks to roll out resolution schemes by September 15
FM Sitharaman said that lenders must extend support to borrowers as and when the moratorium on loan repayments is lifted, asking them to roll out resolution schemes by September 15, 2020.
New Delhi: Finance Minister Nirmala Sitharaman on Thursday held a review meeting with the chiefs of Scheduled Commercial Banks and NBFCs via video conference to review their preparedness for implementation of the loan resolution framework.
During the meeting, Ms Sitharaman impressed upon the lenders that as and when moratorium on loan repayment is lifted, borrowers must be given support. She said COVID-19 related distress must not impact the lenders’ assessment of their creditworthiness.
Finance Minister asked the bankers to roll out loan resolution schemes by September 15 and COVID-19 related distress must not impact their assessment of borrowers’ creditworthiness.
She said that lenders must extend support to borrowers as and when the moratorium on loan repayments is lifted, asking them to roll out resolution schemes by September 15, 2020.
An official statement said 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 timelines stipulated by the Reserve Bank of India (RBI).
The Ministry of Finance has also been engaged with RBI to ensure that the lenders are assisted by RBI in the resolution process.
The Finance Minister also reviewed the progress made by various lenders under Emergency Credit Line Guarantee Scheme (ECLGS), Partial Credit Guarantee Scheme (PCGS) 2.0 and Sub-ordinate Debt Scheme announced as part of the Aatmanirbhar Bharat Abhiyaan.
She asked lenders to try and extend the maximum possible relief to borrowers before the festive season. An amount of Rs 1.58 lakh crore was sanctioned as on August 31 under ECLGS of which more than Rs 1.11 lakh crore has been disbursed.
Under PCGS 2.0, bonds and commercial papers (CPs) of Rs 25,055.5 crore have been approved for purchase by public sector banks, of which Rs 13,318.5 crore amounting to more than 53 per cent of the portfolio pertains to bonds/CPs rated below AA-minus.
The scheme has thus been a crucial intervention for lower-rated bonds/CPs. Sitharaman appreciated the efforts of banks and NBFCs during the lockdown in effective implementation of the Pradhan Mantri Garib Kalyan Yojana and the Aatmanirbhar Bharat related measures.