RBI’s Loan Recast Scheme

RBI’s Loan Recast Scheme

Part of: GS Prelims and Mains III – Economy and related issues; Banking 

In news: 

• RBI cleared a loan restructuring scheme for borrowers who are under stress because of the pandemic. 
• Key sectors, such as micro, small and medium enterprises (MSMEs), hospitality, aviation, retail, real estate and auto, which are facing a liquidity crunch, will benefit from this scheme. 

Do you know? 

• One­time loan restructuring will help soften the COVID­19 pandemic’s impact on banks’ asset quality 
• RBI’s relaxations under the Prudential Framework on Resolution of Stressed Assets will benefit borrowers in most categories