FHRAI

INDIA

News Details

Resolution Framework 2.0 for Individuals, Small Businesses and MSMEs

15 th May 2021

15th May 2021  

The Managing Directors/CEO's/Owners/Director/Partners/General Managers
All Members of FHRAI

CC:   Executive Committee Members of FHRAI
         All Regional Associations

Sub: Resolution Framework 2.0  for Individuals, Small Businesses and MSMEs

Dear Member,

The Reserve Bank of India has recently unveiled a host of measures aimed to protect the small and medium businesses and individual borrowers from the adverse impact of the intense second wave of Covid-19. As part of these measures, RBI re-opened the one-time debt restructuring scheme - Resolution Framework 2.0 – for individuals, small businesses and MSMEs amid the second Covid -19 wave in India.

The highlights of the measures announced by the RBI are the following:

  • Under Resolution Framework 2.0, a new restructuring window will be available for individuals, small businesses and MSMEs who have aggregate dues of up to Rs. 25 crores and whose accounts are classified as ‘standard’ as of March 31, 2021.
  • In respect of small businesses and MSMEs restructured earlier, lending institutions are also being permitted as a one-time measure, to review the working capital sanctioned limits, based on a reassessment of the working capital cycle, margins, etc.
  • In respect of individual borrowers and small businesses who have availed restructuring of their loans under Resolution Framework 1.0, where the resolution plan permitted moratorium of less than two years, lending institutions are being permitted to use this window to modify such plans to the extent of increasing the period of moratorium and/or extending the residual tenor up to a total of 2 years. Other conditions will remain the same.

Copy of the Press Release of RBI dated 5th May 2021 and the copies of RBI notifications on Resolution Framework 2.0 for MSMEs / Small Businesses and Individuals are enclosed for your kind reference.

With best regards,

Jaison Chacko
Secretary General

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The Federation of Hotel & Restaurant Associations of India
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