FM Nirmala Sitharaman to review with top management of Scheduled Commercial Banks and NBFCs on September 3

Finance and Corporate Affairs Minister Nirmala Sitharaman will review with the top management of Scheduled Commercial Banks (SCBs) and Non-Banking Financial Company (NBFCs), the implementation of the resolution framework for COVID-19 related stress in bank loans. She will take stock of the situation with top officials on September 3, 2020.

"Union Minister for Finance & Corporate Affairs Nirmala Sitharaman will review with the top management of SCBs and NBFCs, the implementation of the resolution framework for COVID-19 related stress in bank loans on Thursday, September 3, 2020," the Ministry of Finance said.

The review will focus on enabling businesses and households to avail of the revival framework based on viability. Necessary steps like finalising bank policies and identifying borrowers and issues that require addressing for smooth and speedy implementation will also be deliberated upon.

Shaktikanta Das, Governor, Reserve Bank of India (RBI), after the Monetary Policy Committee (MPC) meet on August 21, 2020, announced the Resolution Framework for COVID-19 related stress.

After taking into consideration the financial health of the banks and depositors, RBI formed a COVID-19 related resolution framework. Mr Das said, businesses are in a lot of stress due to COVID-19 pandemic and if they fail, it will lead to financial instability. However, if they are saved they will repay the loans and subsequently save jobs. He added resolution has replaced moratorium as the bank moratorium was a temporary solution to respond to COVID-19 pandemic buy resolution framework is a permanent solution.