Loan Restructuring Tool

On 6th August 2020, the RBI had announced the development of restructuring framework for stressed accounts of businesses as ‘eligible borrowers’ without their accounts being classified as a Non-Performing Asset (NPA).

In addition to our article dated 25th August 2020 on One-Time Restructuring, the RBI has further disclosed clarifications regarding the restructuring framework and its applicability to businesses. An Expert Committee was constituted and based on their report dated 4th September 2020, the RBI has announced financial parameters and sector-wise benchmark range of thresholds to be taken into consideration while formulating resolution plans of eligible borrowers.