The Finance Minister instructed the lenders to roll out the resolution schemes by 15 September 2020.
Finance Minister Nirmala Sitharaman today said that the coronavirus-led disruptions must not impact the assessment of the creditworthiness of borrowers. While addressing the heads of scheduled commercial banks and NBFCs, Nirmala Sitharaman added that as and when the moratorium on loan repayments is lifted, borrowers must be supported by the lenders, according to the Ministry of Finance. The Finance Minister further instructed the lenders that the resolution schemes must be rolled out by 15 September 2020, and they should do a sustained media campaign to create awareness thereafter. The finance minister was reviewing the state of preparedness for implementation of the loans resolution framework for the coronavirus-related stress.
The focus of today’s meeting was to push lenders to immediately put in place a board-approved policy for resolution, and identifying eligible borrowers and reaching out to them. In an effort to revive the sagging businesses, the quick implementation of a sustained resolution plan by lenders was also placed on the table. She also advised the banks to regularly update FAQs on the resolution framework in Hindi, English, and regional languages.
Replying to FM Sitharaman, the banks and NBFCs have assured that they are ready with resolution policies, and they have started the process of identifying and reaching out to eligible borrowers. They also assured to comply with the timelines stipulated by the Reserve Bank of India (RBI). Meanwhile, FM Sitharaman also reviewed the progress of the Emergency Credit Line Guarantee Scheme (ECLGS), Partial Credit Guarantee Scheme (PCGS) 2.0, and Sub-ordinate Debt Scheme. An amount of Rs 1.58 lakh crore has been sanctioned as on 31 August under ECLGS, out of which more than Rs 1.11 lakh crore has also been disbursed, the ministry informed. Under PCGS 2.0, Bonds/CPs of Rs 25,055.5 crore have also been approved for purchase by the PSU banks, out of which Rs 13,318.5 crore amounting to more than 53 per cent of the portfolio pertains to Bonds or Commercial Papers rated below AA-.