KV Kamath committee to help with Covid-19 related stressed assets

The Reserve Bank of India (RBI) has set up an expert committee under veteran banker KV Kamath to suggest financial parameters for resolution of Covid-19 related stressed assets. The committee will submit its recommendations to the RBI, which will notify them along with modifications, in 30 days.

The other members of the committee will be Diwakar Gupta, T N Manoharan and Ashvin Parekh will be strategy advisor and the Indian Banks’ Association CEO will function as member secretary of the panel.

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About Resolution Framework for COVID-19-related Stress:

RBI has announced a ‘Resolution Framework for COVID-19-related Stress’, as a special window under the Prudential Framework on Resolution of Stressed Assets issued on June 7, 2019.
The resolution framework envisages constitution of an expert committee by the RBI to make recommendations on the required financial parameters to be factored in into the resolution plans, with sector-specific benchmark ranges for such parameters.
The expert committee will also undertake the process validation for the resolution plans to be implemented under this framework, without going into the commercial aspects, in respect of all accounts with aggregate exposure of Rs 1,500 crore and above at the time of invocation.
In a major relief to corporate and retail borrowers, the RBI permitted banks to go for the one-time restructuring of loans that are facing stress due to the COVID-19 crisis with a view to mitigating risks to financial stability.

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