What is K V Kamath set up by RBI?

EDITOR: Reserve Bank of India (RBI) has formed a five member committee under the chairmanship of former ICICI Bank 

CEO KV Kamath.Other members of the committee are-Diwakar Gupta,TN Manoharan,Ashvin Parekh,Sunil Mehta.More members may be added to the committee if required, RBI said.

ROLE OF COMMITTEE?

The committee, which has been constituted by the RBI will make recommendations on-The required financial parameters to be factored into the resolution plans(with sector specific benchmark ranges for such parameters),Will submit its recommendations to the RBI.

A resolution plan is a proposal that aims to provide A resolution to the problem of the corporate debtor’s insolvency and its consequent inability to pay off debts.

The central bank will then notify the same along with modifications,if any, in 30 days.

ANY THRESHOLD?

The Reserve Bank of India (RBI) has set an aggregate exposure threshold of ₹1,500 crore and above For the process validation of resolution plans.

HOW TO ENSURE THESE RESOLUTIONS ARE OF ONLY COVID RELATED STRESSED ASSET?

Only those borrower accounts will be eligible for resolution (under this framework)Which were classified as standard, but not in default for more than 30 days with any lending institution as on March 1, 2020.

OTHER CONDITIONS

The resolution plan can be invoked any time till December 31, 2020 and will have to be implemented within 180 days from the date of invocation.Under the framework,The lending institutions may allow extension of the residual tenor of the loan, with or without payment moratorium, by a period of not more than two years. The underlying theme of this resolution window is preservation of the soundness of the Indian banking sector,

Mr. Das said.