Lawstreet Journal

Loan Moratorium Case

Lawstreet Journal 15 Dec 2020 9:50pm

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The Reserve Bank of India recently informed the Apex Court that borrowers opting for resolution of COVID-19 related stressed loans shall not be required to submit any specific plans. RBI said that borrowers may invoke resolution framework by submitting a request to the lending institutions.

 

“The Resolution Framework does not require any resolution plan in any form to be submitted to the lending institutions at the time of request for invocation. Rather, for invocation, the borrowers are required to merely submit a request to the lending institutions for being considered under the Resolution Framework”- RBI stated before the Supreme Court.

RBI had announced a resolution framework to alleviate the financial stresses faced by entities due to disruption in business activities due to the outbreak of the Covid-19 pandemic. In line with this, it told the Supreme Court that the specific contours of Resolution plan to be implemented may be decided by the lending institutions, in consultation with the borrower.

 

“Thereafter, the lending institutions will take an in-principle decision- as per their Board approved policy- on invoking the Resolution Framework. After such invocation, the specific contours of Resolution plan to be implemented may be decided by the lending institutions, in consultations with the borrower. While for personal loans the resolution plan is to be implemented within 90 days from the date of invocation, for all other loans a period of 180 days from the date of invocation has been prescribed”, read the additional affidavit of the Reserve Bank of India.

VV Giri- Senior Advocate, appeared for the… Continue Reading...


Tagged: Reserve Bank of India  
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