It is very unfortunate that in spite of RBI resolution framework related Covid stressed assests as proactive measures suggested by RBI, lenders are resorting to coercive recovery measures against borrowers who are already facing challenge of survival during this prolonged lockdown period.
“It is high time all stake holders must rise to occasion and offer legitimate help to distressed borrowers,” said Sudhakr Atre, Banking Advisor Laghu Udyog Bharti, and regular columnist in media. Atre while talking to The Live Nagpur, further elobrated RBI issued Notification No RBI/2021-22/31 on May 5, instructing All Commercial Banks (including Small Finance Banks, Local Area Banks and Regional Rural Banks),All Primary (Urban) Co-operative Banks/State Co-operative Banks/ District Central Co-operative Banks, All-India Financial Institutions and All Non-Banking Financial Companies (including Housing Finance Companies)
A. Resolution of advances to individuals and small businesses
1. Lending institutions are permitted to offer a limited window to individual borrowers and small businesses to implement resolution plans in respect of their credit exposures while classifying the same as Standard upon implementation of the resolution plan subject to the conditions specified hereafter.
2. The following borrowers shall be eligible for the window of resolution to be invoked by the lending institutions:
- Individuals who have availed of personal loans (as defined in the Circular DBR.No.BP.BC.99/08.13.100/2017-18 dated January 4, 2018 on “XBRL Returns Harmonization of Banking Statistics”), excluding the credit facilities provided by lending institutions to their own personnel/staff.
- Individuals who have availed of loans and advances for business purposes and to whom the lending institutions have aggregate exposure of not more than Rs.25 crore as on March 31, 2021.
- Small businesses, including those engaged in retail and wholesale trade, other than those classified as MSMEs as on March 31, 2021, and to whom the lending institutions have aggregate exposure of not more than Rs.25 crore as on March 31, 2021.
Atre said, RBI has asked specifically that Lending institutions should accordingly, put in place a Board approved policy to implement the above measures, which should be disclosed in the public domain and placed on their websites in a prominent and easily accessible manner.