On Thursday, Finance Minister Nirmala Sitharaman held a review meeting with the heads of scheduled commercial banks and NBFCs (non-banking finance companies) through video conferencing. The ministry in its statement said that the meeting was to review the state of preparedness of the financial institutions for the implementation of the loans resolution framework for COVID-19 related stress.
Sitharaman asked lenders to provide support to borrowers "as and when the moratorium on loan repayments is lifted" and "COVID-19 related distress must not impact the lenders' assessment of their creditworthiness."
The finance minister also asked lenders to put in place their board-approved policy for resolution by 15 September 2020 and also carry out a sustained media campaign to create awareness on the same.
The ministry's statement said that banks/NBFCs have also been asked to ensure that regularly updated FAQs on the resolution framework are uploaded on their websites in Hindi, English and regional languages, and also circulated to their offices and branches.
Sitharaman also reviewed the progress made by the financial institutions under ECLGS (Emergency Credit Line Guarantee Scheme), PCGS 2.0 (Partial Credit Guarantee Scheme) and Sub-ordinate Debt Schemes announced as part of the 'Aatmnirbhar Bharat Abhiyaan' COVID-19 relief and advised lenders to try and extend the maximum possible relief to borrowers before the festive season.
The ministry in its statement post the meeting on Thursday said that an amount of Rs 1.58 lakh crore has been sanctioned as on 31 August 2020 under ECLGS, out of which more than Rs. 1.11 lakh crore has also been disbursed. Under PCGS 2.0, Bonds/CPs of Rs 25,055.5 crore have been approved for purchase by Public Sector Banks so far, out of which Rs 13,318.5 crore amounting to more than 53 percent of the portfolio pertains to Bonds/CPs rated below "AA-".
"The Scheme has thus been a crucial intervention for lower rated Bonds/CPs," it added.