Page 47 - Banking Finance May 2019 N

ARTICLE

changes in the terms and conditions of the existing
loans get duly reflected in the books of all the
lenders and the borrower entity.

3. Resolution Plan which involves restructuring or
change in ownership in respect of large accounts
(AE Rs.100 crore and above) shall require
Independent Credit Evaluation (ICE) of the residual
debt (aggregate debt) by Credit Rating Agencies
(CRAs) specially authorized by RBI .
4. Accounts with AE of Rs.500.00 crore and above
two ICEs required.
2. In cases where the RP not implemented as per time lines
5. The Resolution Plan shall be considered for specified, the lenders shall file insolvency application
implementation only if they receive a credit opinion under IBC2016 within 15 days from the expiry of the
of RP4 or better for the residual debt from CRAs said timeline(timelines are the upper limit, lenders are
(debt facility with RP4 have moderate degree of free to file insolvency petition under IBC even before
safety, regarding timely servicing of financial the expiry of timelines or even without attempting RP
obligation and having moderate risk)
3. In case of large accounts with AE of Rs.2000.00 crore
6. For implementation of Resolution Plan if the and above where the RP involving restructuring/change
lenders obtain ICE from more than the required in ownership is implemented with the 180 days period,
number of CRAs then the rating should be RP4 or the account should not be in default at any point of
better and lenders directly engage the CRAs and time during the "specified period" if there is any default
the payment of fee for such assignment born by the during the specified period then the lender shall file an
lenders only. insolvency application under IBC within 15 days from the

B. The requirement of ICE shall be applicable to all date of such default.
restructuring of Large accounts implemented from the 4. In case of a default after the expiry of the Specified
date of the guidelines on Revised Framework issued by Period (SP means the period from the date of
RBI (12.02.2018) implementation of RP up to the date by which at least
20% of outstanding principal debt as per RP and
(D) Timelines for Large Accounts to be Referred interest capitalization sanctioned, if any, is repaid.
Under IBC: Specific Period will be reckoned as minimum one year)
1. Accounts with AE of Rs.2000.00 crore and above the then such default shall be reckoned as a fresh default
reference date will be 01.03.2018 and the RP shall be for the purpose of this framework.
implemented as per the following timelines: 5. For accounts with AE of Rs.100.00 crore to Rs.2000.00
(a) If the account is in default as on the reference date crore, RBI intends to announce, over a period of two
(01.03.2018) then RP shall be implemented within years, reference dates for implementing RP.
180 days from the reference date.
(b) If the account is in default after the reference date (E). Prudential Norms:
(01.03.2018) then RP shall be implemented within 1. It may be noted here that during the period when RP is
180 days from the date of First such default. being finalized and implemented, the usual asset
classification norms would continue to apply. RBI has
(c) The above provisions apply even in accounts where
resolution may have been initiated under any of clarified that the process of reclassification of an asset
existing scheme and the accounts which are should not stop merely because RP is under
consideration.
classified as restructured standard assets which are
currently in respective specified periods as per the 2. Provisioning as per IRAC norms in case of insolvency
previous guidelines. applications filed under the IBC. RBI has directed that

BANKING FINANCE | MAY | 2019 | 47