The RBI has revised its FAQs on the Resolution Framework for Covid-19 related stress (Refer KM update dated 8 September & 14 October 2020, below) to clarify on whether invocation under the Resolution Framework requires the borrowers to submit any specific resolution plan and the lenders to agree on implementation of the same before 31 December 2020.

It is clarified that the Resolution Framework  does not require borrowers to submit any specific resolution plan to the lending institutions at the time of request for invocation. They are required only to submit a request to the lending institutions for being considered under the Resolution Framework. Thereafter, the lending institutions will take an in-principle decision, as per their Board approved policy, on invoking the Resolution Framework. After such invocation, the specific contours of the resolution plan to be implemented may be decided by the lending institutions, in consultation with the borrower. In respect of personal loans, the resolution plan is to be implemented within 90 days from the date of invocation, for all other loans a period of 180 days from the date of invocation has been prescribed.

To refer to the revised FAQs as on 12 December 2020, click here.