RBI issues instructions regard to extension of resolution timelines under the Prudential Framework on Resolution of Stressed Assets

Apr 22, 2020 | by Avantis RegTech Legal Research Team


Industry Specific Compliance

The Reserve Bank of India (RBI) on April 17, 2020, issues instructions regard to extension of resolution timelines under the Prudential Framework on Resolution of Stressed Assets dated June 07, 2019 aiming at alleviating the lingering impact of Covid-19 pandemic on the businesses and financial institutions in India.

The instructions are as follows:

1. Lenders are required to implement a resolution plan in respect of entities in default within 180 days from the end of Review Period of 30 days. RBI has decided that in respect of accounts which were within the Review Period as on March 01, 2020, the period from March 01, 2020 to May 31, 2020 shall be excluded from the calculation of the 30-day timeline for the Review Period. In respect of all such accounts, the residual Review Period shall resume from June 01, 2020, upon expiry of which the lenders shall have the usual 180 days for resolution.

2. In case where the Review Period was over, but the 180-day resolution period had not expired as on March 1, 2020, the timeline for resolution shall get extended by 90 days from the date on which the 180-day period was originally set to expire.

3. The lending institutions shall make relevant disclosures in respect of accounts where the resolution period was extended in the ‘Notes to Accounts’ while preparing their financial statements for the half year ending September 30, 2020 as well as the financial years Financial Year 2020 and 2021.

[Notification No. DOR.No.BP.BC.62/21.04.048/2019-20]


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