06/08/2020 02:00 PM | Click to read full article
According to the RBI, lenders must ensure that this restructuring scheme is only available to borrowers who are facing stress on account of Covid-19. Lenders will be required to assess the viability of any resolution plan proposed. Stressed MSME borrowers will also be allowed to restructure their debt.
Permitting restructuring may keep reported bad loans in check. However, analysts have cautioned that a high share of restructuring will be seen as credit negative.