MUMBAI: Reserve Bank of India governor Shaktikanta Das has said banks are expected to come up with board-approved restructuring plans for Covid-affected businesses by the end of the month and they need not wait for the K V Kamath committee‘s report.
According to Das, the Kamath committee appointed by the RBI will come out with a report by September 6 and will only recommend financial parameters that banks must use for restructuring. “These will be only for business loans and not personal loans,” said Das in an interview to news channel CNBC Awaaz.
Some of the banks have already taken approval from their board. “We have already got our board approval for restructuring personal loans. For MSME and retail loans, we do not need any guidelines as there is already a scheme in place. We will put the standard operating procedures in place by next week and communicate to our branches so that they can start the process,” said Union Bank of India chairman Rajkiran Rai.
Das said, “As part of Covid resolution, banks can give moratorium on loan. It will depend on what the bank decides. Most banks will come out with a board-approved policy before the end of this month. They need not wait for the Kamath committee report.” The governor sought to allay fears of hardening interest rates that had gained ground following the release of the minutes of the August 6 monetary policy committee (MPC) meeting.
The governor also assured financial markets that the central bank would take all measures to ensure that the government borrowing takes place without disruption. He also said that the RBI was watching the financial markets and would take whatever steps that are required and had several instruments at its disposal.
On resuming forecasts on macro numbers for the current financial year, Das said that the views of the new MPC members (who will join before the October policy) will have to be taken into consideration. He pointed out that at present there was a lot of uncertainty and any number that the RBI gives would be likely to change. But if there was some clarity with respect to the virus, the RBI could resume forecasts.


Source link