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News Details

21 th May 2021

 

FHRAI Submits Representation To The Governor Seeking:

  • Special Restructuring Window For Hospitality &
  • Removal Of Specific Conditions To Avail Loan Restructuring

The apex Association of hotels and restaurants in the country - Federation of Hotel & Restaurant Associations of India (FHRAI) has stated that the RBI’s latest policy measures as being grossly inadequate to address the problems of the Hospitality industry and that the sector has yet again been ignored. Tourism and hospitality business being seasonal and dynamic, the industry is looking to receive specific tweaks in the RBI’s Resolution Framework 2.0. The FHRAI has submitted a representation to the RBI Governor – Shri Shaktikanta Das requesting to provision a special window for restructuring for the tourism and hospitality sector without any cap on loan exposure. It has also asked for that the benefit of loan restructuring under Resolution Framework 2.0 be extended to include even those who had applied for restructuring under Resolution Framework 1.0, but were not able to do so.

“We welcome the RBI Resolution Framework 2.0 allowing individuals, small businesses and borrowers, and MSMEs exposure of up to Rs.25 crore. While this is good news, the RBI should take into consideration that the Hospitality industry is presently the most affected sector in the country. Relief measures announced in the previous restructuring schemes by the RBI have provided no succor to the Hospitality sector. The Kamath Committee recommendations for restructuring have made the restructuring plan unfavorable for the Hospitality industry. Discretions provided to lending institutions by the RBI in loan restructuring scheme have provided no relief to Hospitality players. Lending institutions are either reluctant or impose unreasonable conditions to avail the restructuring. We request for a special restructuring window for the Tourism and Hospitality sector that provisions the removal of Rs.25 crores cap for restructuring,” says Mr. Gurbaxish Singh Kohli, Vice President, FHRAI.

In the Resolution Framework 2.0, the RBI has mandated accounts be classified as Standard as on March 31, 2021 to be eligible for restructuring. The FHRAI has pointed out that this condition onerously goes against hotels and restaurants who had already applied under the Resolution Framework 1.0, but were not able to restructure their loans.

“Under the Resolution Framework 1.0, many of our member hotels and restaurants had applied for restructuring of their stressed exposures with their banks, but the applications were not processed in majority of the cases. This specific condition now works against the Hospitality industry for availing the restructuring scheme under Resolution Framework 2.0. In view of the abysmal situation of the Hospitality sector, we request the RBI to extend the benefit of loan restructuring to all including to those who had applied for restructuring under Resolution Framework 1.0. The RBI needs to remove the condition requiring accounts to be classified as standard as on March 31, 2021,” concludes Mr. D V S Soma Raju, Honorary Treasurer, FHRAI.

CONTACT US

THE FEDERATION OF HOTEL & RESTAURANT
ASSOCIATIONS OF INDIA

Address:

B-82, 8th Floor, Himalaya House, 23,
K. G. Marg, New Delhi-110 001

Telephone: 011-40780780

E-mail: fhrai@fhrai.com

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