Monetary policy: RBI lends helping hand to distressed retail borrowers

Under the scheme, a resolution plan for personal loans may be invoked till December 31 and will be implemented within 90 days thereafter

With the moratorium on loan repayments ending on August 31, the Reserve Bank of India (RBI) has lent a helping hand to retail borrowers by allowing a first-of-its-kind debt restructuring for personal loans.

The RBI said the economic fallout on account of the Covid-19 pandemic has led to significant financial stress for borrowers. To alleviate the impact of stress on borrowers, the central bank has decided to provide a window under the prudential framework. This will enable lenders to implement a resolution plan in respect of eligible corporate exposures without change in ownership and personal loans, while classifying such exposures