Mumbai (IANS) The Reserve Bank of India (RBI) on Friday announced the constitution of an expert committee led by KV Kamath to make recommendations on a special window for Covid-related stressed assets under the bank's 'Prudential Framework on Resolution of Stressed Assets'.
The panel led by former New Development Bank President Kamath also includes Diwakar Gupta with effect from September 1, 2020, after the completion of his term as Asian Development Bank Vice-President, and TN Manoharan with effect from August 14, 2020, after completion of his term as Canara Bank Chairman.
Ashvin Parekh, Managing Partner at Ashvin Parekh Advisory Services LLP and the Indian Banks' Association (IBA) CEO will be the Strategy Adviser and Member-Secretary respectively, an RBI statement said.
Former Punjab National Bank CEO Sunil Mehta is the current Chief Executive Officer of IBA.
On Thursday, RBI Governor Shaktikanta Das had announced that in order to facilitate the revival of economic activities and mitigate the impact on ultimate borrowers, a window will be provided under the 'Prudential Framework' to enable lenders to implement a resolution plan in respect of eligible corporate exposures without a change in ownership, and personal loans, while classifying such exposures as standard, subject to specified conditions.
He also announced the Kamath-led panel to make recommendations on the required financial parameters to be factored into the resolution plans, with sector-specific benchmark ranges for such parameters.
"The expert committee shall also undertake the process validation for the resolution plans under this framework, without going into the commercial aspects, in respect of all accounts with aggregate exposure of Rs 1,500 crore and above at the time of invocation," the RBI statement added on Friday.
The committee will submit its recommendations on the financial parameters to the RBI which, in turn, will notify the same along with modifications, if any, within 30 days. The IBA will function as the Secretariat for the committee that is fully empowered to consult or invite any person it deems fit.
The panel may devise its own procedures for its functioning. It will function under the aegis of the RBI. Accordingly, its expenses and those of its Secretariat will be borne by the apex bank. The committee may be expanded to include more members as and when necessary, the RBI statement said.