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RBI sets up 5-member panel under KV Kamath to assist in loan recasts

Diwakar Gupta and TN Manoharan will be part of committee after they complete their terms in their respective organisations.

A day after it announced a loan recast window for companies, the Reserve Bank of India (RBI) on Friday constituted a five-member expert committee to recommend financial parameters and sector specific benchmarks for resolution. “The committee shall submit its recommendations on the financial parameters to the Reserve Bank which, in turn, shall notify the same along with modifications, if any, in 30 days,” the RBI said.

The committee will be chaired by KV Kamath, former chief of New Development Bank and include Diwakar Gupta, vice-president, Asian Development Bank, TN Manoharan, chairman, Canara Bank, Ashwin Parekh and Sunil Mehta, CEO, Indian Banks Association.

Diwakar Gupta and TN Manoharan will be part of committee after they complete their terms in their respective organisations.

The expert committee will validate resolution plans where the debt is more than Rs 1,500 crore, without going into the commercial aspects.

It will be empowered to consult or invite any person it deems fit, and can devise its own procedures for its internal functioning, the RBI said. The committee may be expanded as and when necessary.

On Thursday, the regulator announced a one-time window to recast corporate loans with necessary safeguards. “The resolution under this facility is provided only to the borrowers having stress on account of Covid-19,” RBI governor Shaktikanta Das said on Thursday. Eligible borrowers should not have dues more than 30 days as on March 1.

Under the recast window, banks would be able to restructure corporate loans, extend loan tenors sanction additional credit and also allow a moratorium of up to two years. They need to make a capital provision of 10%.

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