Rs 10 trillion, or 8%, of loans will get recast under new framework: Icra

Banks and non-bank lenders will restructure up to Rs 10 trillion in debt, or 8 per cent of outstanding loans, under the one-time restructuring scheme announced by the Reserve Bank, domestic rating agency ICRA said on Wednesday.

The RBI has operationalised guidelines based on K V Kamath-led panel's recommendations, which give relief to 26 listed sectors affected by the pandemic and stress on banks factoring-in leverage, liquidity and debt serviceability before admitting a case.

"We feel the overall restructured portfolio will come at 5-8 per cent of the overall loans," the agency's head of credit policy Jitin Makkar told reporters on Wednesday.

In value terms, he said the total quantum of the debt which can get restructured will be between Rs 6 trillion and Rs 10 trillion, specifying that banks have an asset book of Rs 100 trillion and another Rs 35 trillion is from the non-bank lenders.

He said the estimate on the amount of portfolio to be restructured is based on an assumption that the overall assets under moratorium came down to 20-25 per cent by the close of the six-month relief in August.

A part of the assets enjoying the moratorium are special mention accounts where repayments were due for 31 to 89 days, which cannot be restructured under the new guidelines, he added.