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KV Kamath Panel Identifies 26 COVID-19-Affected Sectors For Debt Resolution
07 Sep 2020, 09:48 PM IST 
- The sectors include aviation, hospitality and real estate, which are among the worst hit sectors in wake of COVID-19 and related restrictions.
- The five financial ratios include parameters such as total debt and debt service coverage ratios, which determine a company's ability to clear its debt using operating income.
- The panel recommended specific levels to determine eligible businesses in the sectors, which, "may require some time to restore their position to pre-COVID-19 levels", said the report, submitted to the RBI on September 4.
- The resolution plan will apply only to borrowers classified as standard and with arrears less than 30 days, as of March 1, 2020, the central bank said.
- Banks will make their own assessment in case of sectors for which the levels have not been specified, the RBI said.
- The committee selected these parameters after talks with rating agencies and lending institutions and said lenders can also consider their own financial parameters to decide on resolution plans for their customers.
- Lenders have been directed to take into account the pre-COVID-19 financial performance of the company for considering the resolution plan.
- They will need to make an additional 10 per cent provisioning for loan accounts that are being restructured.
- The RBI had formed the 5-member committee under the chairmanship of Mr Kamath, the former head of the New Development Bank, last month.
- The primary task of the committee was to identify the sectors worst hit by COVID-19 and suggest a plan to provide loan restructuring to the impacted businesses.