This Article is From Sep 07, 2020

RBI's KV Kamath Committee Picks 26 Sectors For Loan Restructuring, Lists Criteria

The committee will also scrutinise restructuring of loans above Rs 1,500 crore

RBI's KV Kamath Committee Picks 26 Sectors For Loan Restructuring, Lists Criteria

RBI appointed KV Kamath Committee has given its recommendations for loan restructuring

The Reserve Bank of India (RBI) appointed KV Kamath committee on Monday picked 26 sectors which will need loan restructuring and listed the respective parameters the sectors need to meet in order to avail the scheme from the lenders. The committee was formed last month under the chairmanship of former ICICI Bank CEO KV Kamath to make recommendations on the financial parameters to be considered in the restructuring of loans impacted by the COVID-19 pandemic.

According to a release by the RBI, the lenders need to consider financial parameters like total outside liability to adjusted tangible net worth, debt to EBIDTA, current ratio, debt service coverage ratio (DSCR) and average debt service coverage ratio (ADSCR), before clearing restructuring of loans. Based on these criteria, sector-specific thresholds for each ratio in respect of 26 sectors have been prescribed by the committee. The lenders are also free to consider other parameters, the release also said.

The release further said that the committee will also scrutinise restructuring of loans above Rs 1,500 crore and that the term of the committee has been extended till June 30, 2021.

Last week, Finance Minister Nirmala Sitharaman had asked banks and non-banking financial companies (NBFCs) to roll out a loan restructuring scheme for companies.


 

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