The Reserve Bank of India vide its notification dated 17th August 2020 has extended the period for implementation of resolution plan by 90 days.
In terms of the existing Prudential Framework, lenders are required to implement a resolution plan in respect of entities in default within 180 days from the end of Review Period of 30 days. However RBI has decided that in respect of accounts which were within the Review Period as on March 1, 2020, the period from March 1, 2020 to May 31, 2020 shall be excluded from the calculation of the 30-day timeline for the Review Period. In respect of all such accounts, the residual Review Period shall resume from June 1, 2020, upon expiry of which the lenders shall have the usual 180 days for resolution.
Further the lending institutions should make relevant disclosures in respect of accounts where the resolution period was extended in the ‘Notes to Accounts’ while preparing their financial statements for the half-year ending September 30, 2020 as well as for FY20 and FY21.
Click here to read the notification.
