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New Delhi, Aug 30 Finance Minister Nirmala Sitharaman will review the implementation of resolution framework for Covid-related stress in bank loans, with the top management of scheduled commercial banks and non-banking financial companies (NBFC) on Thursday.As the pandemic has led to severe economic stress across sectors, the Reserve Bank of India (RBI) earlier this month announced to provide a resolution framework to enable the lenders to implement a resolution plan, in respect of eligible corporate borrowers without change in ownership while continuing the account status as standard, subject to specified conditions."The review 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," a Finance Ministry statement said on Sunday.Announcing the move post the Monetary Policy Committee's (MPC) meeting, the RBI Governor said that the move has been announced in a bid to provide relief to stressed companies which have not been able to repay loans due to cash flow issues amid the pandemic.The prudential framework dated June 7, 2019 provides a principle-based resolution framework for addressing borrower defaults under a normal scenario.Any resolution plan implemented under the framework which involves granting of any concessions on account of financial difficulty of the borrower entails an asset classification downgrade, except when it is accompanied by a change in ownership, which allows the asset classification to be retained or upgraded to Standard, subject to the prescribed conditions.The RBI decided to provide a window under the Prudential Framework to enable the lenders to implement a resolution plan in respect of eligible corporate exposures without change in ownership, and personal loans, while classifying such exposures as Standard subject to specified conditions.( With inputs from IANS )Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor

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