Borrowers seeking debt resolution can apply by December 31: RBI

The Reserve Bank of India (RBI) clarified on Saturday that borrowers, seeking a resolution of their bad debts under the Covid-19 stress scheme as suggested by the KV Kamath committee, do not need to present a resolution plan that Lenders would evaluate, but you can simply apply before December 31st.

“The Resolution Framework does not require that any resolution plan be submitted in any form to lenders at the time of the invocation request,” the central bank said in an update to its frequently asked questions (FAQ) section on the framework resolution for Covid. -19 related stress.

“Rather, for the invocation, borrowers are required to simply submit an application to the credit institutions to be considered under the resolution framework,” After the request is submitted, the credit institutions will make a decision in principle on the invocation. of the resolution framework.

After such an invocation, lenders will decide the specific outlines of the resolution plan, in consultation with the borrower, the FAQ said. For personal loans, the resolution plan must be implemented within 90 days from the invocation date, for the entire prescribed period is 180 days.

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