Moneycontrol

Budget 2021

Associate Partners:

  • SMC
  • Samsung
  • Volvo

Moneycontrol

Budget 2021

Associate Partners:

  • SMCSamsungVolvo
Webinar :Join an expert panel for a webinar on Smart investments for a secure retirement January 28, 2021. Register now!
you are here: HomeNewsBusiness

RBI loan restructuring norms could exclude large number of companies: Report

Bankers expect advances worth only Rs 2-3 lakh crore, or 2-3 per cent of overall bank loans, to be eligible for restructuring

September 08, 2020 / 03:36 PM IST

A large number of companies may be left out of the Reserve Bank of India's (RBI's) norms on corporate loan structuring, as bankers expect advances worth only Rs 2-3 lakh crore, or 2-3 per cent of overall bank loans, to be eligible for restructuring.

A five-member committee headed by VK Kamath, constituted by the RBO to look into parameters within which restructuring can be allowed, has submitted it recommendations to the central bank, The Times of India reported.

Bankers said companies that delayed repayments before March 2020 will not qualify, even if they are not classed as non-performing assets (NPAs).

Industry watcher India Ratings (Ind-Ra) had earlier estimated that 7.7 percent or Rs 8.4 lakh crore of bank loans would require restructuring. Of this only 1.9 percent loans are non-corporate. It also said over Rs 5 lakh crore of loans would slip into NPAs without a recast.

The RBI had on August 6 said banks can conduct a one-time restructuring of loans, a move intended to provide borrowers relief during the COVID-19 pandemic.

Close

COVID-19 Vaccine

Frequently Asked Questions

View more
How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

View more
Show

While bankers say the Insolvency and Bankruptcy Code (IBC) has addressed a large portion of stress in the system, the 30-day clause has excluded borrowers who were struggling even before the pandemic.

As such only real estate, property, hospitality, airlines, consumer and retail sector companies and infrastructure projects that lost on revenue during the lockdown would be entertained, it added.

“Even stressed assets that may not slip in the near term could be restructured as the COVID-19 pandemic would have aggravated stress. Nearly 53 percent of this pool is at a high probability of restructuring/slippages. The balance 47 percent is at moderate risk of restructuring, and the progress on these accounts will depend upon the progress of the COVID-19 situation,” Ind-Ra said.
Moneycontrol News
first published: Sep 7, 2020 04:34 pm
Sections