RBI releases expert committee report on resolution framework for Covid-related stress – Times of India

NEW DELHI: The Reserve Bank of India (RBI) on Monday released a report by the K V Kamath Committee which was formed to make recommendations on the required financial parameters to be factored in the resolution plans under the ‘Resolution Framework for Covid-related Stress’.
In an official statement, the RBI said that the Committee has recommended recommended financial ratios for 26 sectors which could be factored by lending institutions while finalising a resolution plan for a borrower. These include aspects related to leverage, liquidity and debt serviceability.
The framework enables lending institutions including NBFCs, which are an essential part of the lenders’ pool under this framework, to implement a resolution plan (RP) in respect of eligible corporate exposure even without change in ownership while classifying such exposure as standard, subject to specified conditions.
These sectors include aviation, hospitality, real estate which are some of the most stressed sectors in the economy due to the impact of Covid-19 pandemic.
The recommendations of the Committee have been broadly accepted by the Reserve Bank, the statement said.