The Reserve Bank of India (RBI) has increased the exposure threshold to benefit under its Resolution Framework 2.0 to Rs 50 crore.
The ‘Resolution Framework 2.0’ announced by RBI on May 5, 2021, so far had mandated a maximum aggregate exposure of Rs 25 crore for considering resolution of COVID-19 related stress of MSMEs as well as non-MSME small businesses, and loans to individuals for business purposes.
“Based on a review, it has been decided to enhance the above exposure threshold to Rs 50 crore. Accordingly, the above categories of borrowers to whom the lending institutions have aggregate exposure of not more than Rs 50 crore as on March 31, 2021, and which have not been restructured earlier under any of the specified restructuring frameworks, shall be eligible to be considered for resolution under Resolution Framework 2.0,” said the RBI’s Statement on Developmental and Regulatory Policies.
This move would ensure more businesses get relief under the scheme. The decision comes at a crucial time as the most business activities across the country remain shut or are partially operational amid the severe second wave of Covid-19 and the lockdowns across states.
Banks had last month asked the central bank to expand the ambit of the scheme and raise its exposure limit to above Rs 25 crore.