Loan restructuring: RBI sets up panel under KV Kamath to work on resolution plan

The Reserve Bank of India (RBI) has constituted an expert committee under the chairmanship of KV Kamath to make recommendations on the proposed resolution plan for stressed borrowers impacted by COVID-19.

The panel will make recommendations on the required financial parameters to be factored in the resolution plans, with sector-specific benchmark ranges for such parameters.

The expert committee shall 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 1500 crore and above at the time of invocation, the RBI said.

The other members of the committee include Diwakar Gupta, Vice President, ADB, TN Manoharan Chairman, Canara Bank, Ashvin Parekh, strategy advisor and CEO, Indian Banks’ Association.

The committee will make its recommendations on the financial parameters to the RBI in 30 days, the central bank said, adding the Indian Banks’ Association shall function as the Secretariat to the committee.

The Committee will function under the aegis of the Reserve Bank, and accordingly, the expenses of the committee and its Secretariat will be fully borne by the RBI.

The composition of the committee may be expanded and other members may be added as and when necessary, the RBI stated.