Borrowers seeking debt resolution can make a request by December 31: RBI

The Reserve Bank of India (RBI) on Saturday clarified that borrowers, seeking resolution of their bad debt under the Covid-19 stress scheme as suggested by the KV Kamath committee, need not submit a resolution plan that the lenders would evaluate, rather, they can simply request by December 31.   

“The Resolution Framework does not require any resolution plan in any form to be submitted to the lending institutions at the time of request for invocation," the central bank said in an update of its frequently asked question (FAQ) section on resolution framework for Covid-19 related stress. 

“Rather, for invocation, the borrowers are required to merely submit a request to the lending institutions for being considered under the resolution framework," After the request is submitted, the lending institutions will take an in-principle decision on invoking the resolution framework.  

After such invocation, the specific contours of resolution plan will be decided by the lending institutions, in consultation with the borrower, the FAQ said. For personal loans the resolution plan is to be implemented within 90 days from the date of invocation, for all the prescribed period is 180 days.