FM Sitharaman to hold review meeting with banks, NBFCs on loan recast

Finance Minister Nirmala Sitharaman will meet with heads of banks and NBFCs on Thursday to review the implementation of the loan recast for resolution of COVID-19 related stress.

"The review (meeting) will focus on enabling businesses and households to avail of the revival framework on the basis of viability, necessary steps like finalising bank policies and identifying borrowers, and discussing issues that require addressing for smooth and speedy implementation," the Finance Ministry had said earlier this week.

Last month, the Reserve Bank of India (RBI) had allowed a one-time restructuring of both corporate and retail loans without getting classified as a non-performing asset (NPA). Following the central bank's August 6 notification that defined the framework and eligibility, banks are in the process of getting a board-approved restructuring framework.

The benefit of restructuring can be availed by those whose account was standard on March 1 and defaults are not over 30 days.

Notably, to encourage banks to extend loans to startups, priority sector lending status has been extended.

The RBI had announced an optional 6-month moratorium for customers towards fixed-term loans and EMI payments. Borrowers opting for moratorium had the option to defer payment of the interest and principal component of the loan during this period. The moratorium period ended on August 31.