The Reserve Bank has said that 26 areas affected by the Covid-19 epidemic will be given the benefit of debt restructuring scheme. On Monday, the RBI approved KV Kamat’s recommendations on the plan, stating that the debt restructuring plan would be implemented on five parameters and the financial problems of the epidemic-hit industry sectors would be resolved.
On August 7, RBI formed a committee headed by former banker KV Kamat to suggest a debt restructuring plan. The committee submitted its report on 4 September, based on which five standards have been created for the industry sectors to be included in the scheme. The central bank has approved most of the suggestions of the report and has given permission to implement debt restructuring scheme in 26 sectors.
However, the benefit of the facility will be given only to companies with better Covid-19 pre-account operations. This will include both operational and financial performance. It will also be seen that the crisis over their payments and cash has come only after the epidemic. While implementing the scheme, the lenders will keep in mind which areas have been affected the most by the current challenges.
The 26 sectors RBI has allowed to be included in the scheme include automobile, energy, auto equipment, aviation, tourism, cement, chemicals, gems and jewelery, freight, mining, manufacturing, real estate, airports, etc. Covid-19 has affected the sectors like tourism and aviation the most.
RBI has stated that the total debt on MSMEs to be included in the scheme should not exceed Rs 25 crore by March 1, 2020. Primary Agricultural Credit Societies and Farmers’ Service Societies will also benefit.
