The Reserve Bank of India (RBI) has set up an expert committee under veteran banker KV Kamath to suggest financial parameters for resolution of coronavirus-related stressed assets.
The committee will submit its recommendations to the RBI, which will notify them along with modifications, if any, in 30 days reported a news agency .
As part of the Statement on Developmental and Regulatory Policies released along with the Monetary Policy Statement on Thursday, the RBI has announced a ‘Resolution Framework for COVID-19-related Stress’, as a special window under the Prudential Framework on Resolution of Stressed Assets issued on June 7, 2019.
The resolution framework envisages constitution of an expert committee by the RBI to make recommendations on the required financial parameters to be factored in into the resolution plans, with sector-specific benchmark ranges for such parameters.
The expert committee will 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 an aggregate exposure of Rs 1,500 crore and above at the time of invocation.
The other members of the committee will be Diwakar Gupta (effective September 1, 2020, after the completion of his term as vice-president of ADB); T N Manoharan (effective August 14, 2020, after the completion of his term as chairman of Canara Bank); and Ashvin Parekh will be strategy advisor; and the Indian Banks’ Association CEO will function as member secretary of the panel.