The ongoing Covid-19 pandemic has led to significant financial stress for borrowers across the board. The resultant stress can potentially impact the long-term viability of many firms, otherwise having a good track record under the existing promoters, due to their debt burden becoming disproportionate relative to their cash flow generation abilities. Such widespread impact could impair the entire recovery process, posing significant financial stability risks.
Considering the above, with the intent to facilitate revival of real sector activities and mitigate the impact on the ultimate borrowers, it has been decided by RBI to provide a window under the Prudential Framework for Resolution of Stressed Assets dated June 07, 2019 RBI/2018-19/203 DBR.No.BP.BC.45/21.04.048/2018-19 (“June 7th Framework”) to enable the lenders to implement a resolution plan in respect of eligible corporate exposures without change in ownership, while classifying such exposures as Standard, subject to specified conditions.
As per RBI circular on “Resolution Framework for COVID-19-related Stress” DOR.No.BP.BC/3/21.04.048/2020-21 dated August 06, 2020 (“Covid Stress Resolution Circular” or “the Covid Framework”), Piramal Finance Limited has framed a Board-approved policy to implement the abovementioned resolution framework.
This policy is in adherence to the Covid Framework and will only be extended to borrowers having stress on account of Covid19. Any additional / incremental changes instructed by the regulator under same issue shall be amended in subsequent versions of the policy.
Borrowers shall need to meet all the three criteria as mentioned below,
The final decision on the Eligible borrowers shall be with the Approving Authority.