https:// 27.03.2020 5.

Moratorium on Term Loans

www.rbi.org.in
/scripts/ All commercial banks (including regional rural banks, small finance
BS_PressReleas banks and local area banks), co-operative banks, all-India
Financial Institutions, and NBFCs (including housing finance
eDisplay.aspx? companies and micro-finance institutions) (“lending institutions”)
prid=49582 are being permitted to allow a moratorium of three months on
payment of instalments in respect of all term loans outstanding as
on March 1, 2020. Accordingly, the repayment schedule and all
subsequent due dates, as also the tenor for such loans, may be
shifted across the board by three months.

6. Deferment of Interest on Working Capital Facilities

In respect of working capital facilities sanctioned in the form of

cash credit/overdraft, lending institutions are being permitted to
allow a deferment of three months on payment of interest in
respect of all such facilities outstanding as on March 1, 2020. The
accumulated interest for the period will be paid after the expiry of
the deferment period.

In respect of paragraphs 5 and 6 above, the moratorium/deferment

is being provided specifically to enable the borrowers to tide over
the economic fallout from COVID-19. Hence, the same will not be
treated as change in terms and conditions of loan agreements due
to financial difficulty of the borrowers and, consequently, will not
result in asset classification downgrade. The lending institutions
may accordingly put in place a Board approved policy in this
regard.

7. Easing of Working Capital Financing

In respect of working capital facilities sanctioned in the form of

cash credit/overdraft, lending institutions may recalculate drawing
power by reducing margins and/or by reassessing the working
capital cycle for the borrowers. Such changes in credit terms
permitted to the borrowers to specifically tide over the economic
fallout from COVID-19 will not be treated as concessions granted
due to financial difficulties of the borrower, and consequently, will
not result in asset classification downgrade.

In respect of paragraphs 5, 6 and 7, the rescheduling of payments

will not qualify as a default for the purposes of supervisory
reporting and reporting to credit information companies (CICs) by
the lending institutions. CICs shall ensure that the actions taken by
lending institutions pursuant to the above announcements do not
adversely impact the credit history of the beneficiaries.

https:// March 27, (i) Rescheduling of Payments – Term Loans and Working
www.rbi.org.in 2020 Capital Facilities
/scripts/
NotificationUse 2. In respect of all term loans (including agricultural term loans,
retail and crop loans), all commercial banks (including regional
r.aspx? rural banks, small finance banks and local area banks), co-
Mode=0&Id=1 operative banks, all-India Financial Institutions, and NBFCs
1835 (including housing finance companies) (“lending institutions”) are
permitted to grant a moratorium of three months on payment of all
instalments1 falling due between March 1, 2020 and May 31, 2020.
The repayment schedule for such loans as also the residual tenor,
will be shifted across the board by three months after the
moratorium period. Interest shall continue to accrue on the
outstanding portion of the term loans during the moratorium period.

3. In respect of working capital facilities sanctioned in the form of

cash credit/overdraft (“CC/OD”), lending institutions are permitted
to defer the recovery of interest applied in respect of all such
facilities during the period from March 1, 2020 upto May 31, 2020
(“deferment”). The accumulated accrued interest shall be
recovered immediately after the completion of this period.

(ii) Easing of Working Capital Financing

4. In respect of working capital facilities sanctioned in the form of

CC/OD to borrowers facing stress on account of the economic
fallout of the pandemic, lending institutions may recalculate the
‘drawing power’ by reducing the margins and/or by reassessing the
working capital cycle. This relief shall be available in respect of all
such changes effected up to May 31, 2020 and shall be contingent
on the lending institutions satisfying themselves that the same is
necessitated on account of the economic fallout from COVID-19.
Further, accounts provided relief under these instructions shall be
subject to subsequent supervisory review with regard to their
justifiability on account of the economic fallout from COVID-19.

Classification as Special Mention Account (SMA) and Non-

Performing Asset (NPA)

5. Since the moratorium/deferment/recalculation of the ‘drawing

power’ is being provided specifically to enable the borrowers to
tide over economic fallout from COVID-19, the same will not be
treated as concession or change in terms and conditions of loan
agreements due to financial difficulty of the borrower under
paragraph 2 of the Annex to the Reserve Bank of India (Prudential
Framework for Resolution of Stressed Assets) Directions, 2019
dated June 7, 2019 (“Prudential Framework”). Consequently, such
a measure, by itself, shall not result in asset classification
downgrade.

6. The asset classification of term loans which are granted relief as

per paragraph 2 shall be determined on the basis of revised due
dates and the revised repayment schedule. Similarly, working
capital facilities where relief is provided as per paragraph 3 above,
the SMA and the out of order status shall be evaluated considering
the application of accumulated interest immediately after the
completion of the deferment period as well as the revised terms,
as permitted in terms of paragraph 4 above.

7. The rescheduling of payments, including interest, will not qualify

as a default for the purposes of supervisory reporting and reporting
to Credit Information Companies (CICs) by the lending institutions.
CICs shall ensure that the actions taken by lending institutions
pursuant to the above announcements do not adversely impact the
credit history of the beneficiaries.
https:// April II(B). Regulatory Measures
www.rbi.org.in 17,2020
/scripts/ 15. On March 27, 2020 the Reserve Bank had announced certain
Bs_viewconten regulatory measures to mitigate the burden of debt servicing
brought about by disruptions on account of COVID-19 and to
t.aspx?Id=3853 ensure the continuity of viable businesses. Based on a review of
the rapidly evolving situation, and consistent with the globally
coordinated action committed to by the Basel Committee on
Banking Supervision to alleviate the impact of Covid-19 on the
global banking system, additional regulatory measures are being
announced today.

Asset Classification

16. Economic activity has come to a standstill during the period of

the lockdown, with consequential lingering effects which have
unambiguously affected the cash flows of households and
businesses. On March 27, 2020 the RBI had permitted lending
institutions (LIs) to grant a moratorium of three months on payment
of current dues falling between March 1 and May 31, 2020. It is
recognized that the onset of COVID-19 has also exacerbated the
challenges for such borrowers even to honour their commitments
fallen due on or before February 29, 2020 in Standard Accounts.
The Basel Committee on Banking Supervision (BCBS) has taken
cognizance of the financial and economic impact of COVID-19 and
very recently announced that “………. the payment moratorium
periods (Public or granted by banks on a voluntary basis) relating
to the COVID-19 outbreak can be excluded by banks from the
number of days past due” in respect of NPA recognition.

17. Therefore, it has been decided that in respect of all accounts

for which lending institutions decide to grant moratorium or
deferment, and which were standard as on March 1, 2020, the 90-
day NPA norm shall exclude the moratorium period, i.e., there
would an asset classification standstill for all such accounts from
March 1, 2020 to May 31, 2020. NBFCs, which are required to
comply with Indian Accounting Standards (IndAS), may be guided
by the guidelines duly approved by their boards and as per
advisories of the Institute of Chartered Accountants of India (ICAI)
in recognition of impairments. In other words, NBFCs have
flexibility under the prescribed accounting standards to consider
such relief to their borrowers.

18. At the same time, we are cognizant of the risk build-up in

banks’ balance sheets on account of firm-level stress and delays in
recoveries. With the objective of ensuring that banks maintain
sufficient buffers and remain adequately provisioned to meet future
challenges, they will have to maintain higher provision of 10 per
cent on all such accounts under the standstill, spread over two
quarters, i.e., March, 2020 and June, 2020. These provisions can
be adjusted later on against the provisioning requirements for
actual slippages in such accounts.

https:// April Regulatory Measures

www.rbi.org.in 30,2020
/scripts/
PublicationsVie i) Asset Classification
w.aspx?
Id=19441 The Reserve Bank allowed banks to delay the classification of
stressed borrowers as defaulters in respect of moratorium
accounts which were standard as on March 01, 2020. The NPA
norms shall exclude the moratorium period. There would be
classification standstill for all such accounts from March 01, 2020
to May 31, 2020. NBFCs have flexibility under the prescribed
accounting standards to consider such relief to their borrowers.

ii) Extension of Resolution Timeline

Recognising the challenges to resolution of stressed assets in the

current volatile environment, the Reserve Bank decided to extend
the resolution timeline of stressed assets as per its prudential
framework by 90 days.

https:// May III. Measures to Ease Financial Stress

www.rbi.org.in 22,2020
/scripts/ The intensification of COVID-19 disruptions has imparted priority to
BS_PressReleas relaxing repayment pressures and improving access to working
capital by mitigating the burden of debt servicing, prevent the
eDisplay.aspx? transmission of financial stress to the real economy, and ensure
prid=49844 the continuity of viable businesses and households.

6. Moratorium on Term Loan Instalments

On March 27, 2020, the RBI permitted all commercial banks

(including regional rural banks, small finance banks and local area
banks), co-operative banks, all-India Financial Institutions, and
NBFCs (including housing finance companies and micro-finance
institutions) (referred to hereafter as “lending institutions”) to allow
a moratorium of three months on payment of instalments in
respect of all term loans outstanding as on March 1, 2020. In view
of the extension of the lockdown and continuing disruptions on
account of COVID-19, it has been decided to permit lending
institutions to extend the moratorium on term loan instalments by
another three months, i.e., from June 1, 2020 to August 31, 2020.
Accordingly, the repayment schedule and all subsequent due
dates, as also the tenor for such loans, may be shifted across the
board by another three months.

7. Deferment of Interest on Working Capital Facilities

In respect of working capital facilities sanctioned in the form of

cash credit/overdraft, lending institutions are being permitted to
allow a deferment of another three months, from June 1, 2020 to
August 31, 2020, in addition to the three months allowed on March
27, 2020 on payment of interest in respect of all such facilities
outstanding as on March 1, 2020.

8. Payment of Interest on Working Capital Facilities for the

Deferment Period

In order to ameliorate the difficulties faced by borrowers in

repaying the accumulated interest for the deferment period on
working capital facilities in one shot, lending institutions are
permitted to convert the accumulated interest on working capital
facilities over the deferment period (up to August 31, 2020) into a
funded interest term loan which shall be repayable not later than
the end of the current financial year (i.e., March 31, 2021).

Lending institutions may, accordingly, put in place a Board

approved policy to implement the measures announced in para 6,
7, 8.

9. Asset Classification

(i) As the moratorium/deferment is being provided specifically to

enable borrowers to tide over COVID-19 disruptions, the same will
not be treated as changes in terms and conditions of loan
agreements due to financial difficulty of the borrowers and,
consequently, will not result in asset classification downgrade.

(ii) As earlier, the rescheduling of payments on account of the

moratorium/deferment will not qualify as a default for the purposes
of supervisory reporting and reporting to credit information
companies (CICs) by the lending institutions. CICs shall ensure
that the actions taken by lending institutions in pursuance of the
announcements made today do not adversely impact the credit
history of the borrowers.

(iii) In respect of all accounts for which lending institutions decide

to grant moratorium/deferment, and which were standard as on
March 1, 2020, the 90-day NPA norm shall also exclude the
extended moratorium/deferment period. Consequently, there
would be an asset classification standstill for all such accounts
during the moratorium/deferment period from March 1, 2020 to
August 31, 2020. Thereafter, the normal ageing norms shall apply.

(iv) NBFCs, which are required to comply with Indian Accounting

Standards (IndAS), may follow the guidelines duly approved by
their Boards and advisories of the Institute of Chartered
Accountants of India (ICAI) in recognition of impairments. Thus,
NBFCs have flexibility under the prescribed accounting standards
to consider such relief to their borrowers.

10. Easing of Working Capital Financing

(i) In respect of working capital facilities sanctioned in the form of

cash credit/overdraft, lending institutions are permitted to
recalculate the ‘drawing power’ by reducing the margins till the
extended period, i.e., August 31, 2020. In order to smoothen the
impact for the borrowers, lending institutions are permitted to
restore the margins to the original levels by March 31, 2021.

(ii) Further, lending institutions are permitted to reassess the

working capital cycle of a borrowing entity up to an extended
period till March 31, 2021. This will provide necessary leeway to
the lenders to make an informed assessment about the impact of
the pandemic on the entity concerned.
 (iii) Such changes in credit terms permitted to the borrowers to
specifically tide over COVID-19’s fallout will not be treated as
concessions granted due to financial difficulty of the borrower,
under Paragraph 2 of the Annex to the Reserve Bank of India
(Prudential Framework for Resolution of Stressed Assets)
Directions, 2019 dated June 7, 2019 (‘Prudential Framework’),
and consequently, will not result in asset classification downgrade.

https:// May (C) Measures to Ease Financial Stress

www.rbi.org.in 22,2020
/scripts/ 23. The RBI had earlier, on two separate occasions (March 27 and
Bs_viewconten April 17, 2020), announced certain regulatory measures pertaining
to (a) granting of 3 months moratorium on term loan installments;
t.aspx? (b) deferment of interest for 3 months on working capital facilities;
Id=3859#FA1 (c) easing of working capital financing requirements by reducing
margins or reassessment of working capital cycle; (d) exemption
from being classified as ‘defaulter’ in supervisory reporting and
reporting to credit information companies; (e) extension of
resolution timelines for stressed assets; and (f) asset classification
standstill by excluding the moratorium period of 3 months, etc. by
lending institutions.

24. In view of the extension of the lockdown and continuing

disruptions on account of COVID-19, the above measures are
being extended by another three months from June 1, 2020 till
August 31, 2020 taking the total period of applicability of the
measures to six months (i.e. from March 1, 2020 to August 31,
2020). The lending institutions are being permitted to restore the
margins for working capital to their original levels by March 31,
2021. Similarly, the measures pertaining to reassessment of
working capital cycle are being extended up to March 31, 2021.

25. Additionally, it has been decided to permit lending institutions

to convert the accumulated interest on working capital facilities
over the total deferment period of 6 months (i.e. March 1, 2020 up
to August 31, 2020) into a funded interest term loan which shall be
fully repaid during the course of the current financial year, ending
March 31, 2021.

26. In view of the current difficulty in raising resources from capital

markets, the group exposure limit of banks is being increased from
25 per cent to 30 per cent of eligible capital base, for enabling
corporates to meet their funding requirements from banks. The
increased limit will be applicable up to June 30, 2021.

https:// May (i) Rescheduling of Payments – Term Loans and Working

www.rbi.org.in 23,2020 Capital Facilities
/scripts/
NotificationUse 2. In view of the extension of lockdown and continuing disruption
on account of COVID-19, all commercial banks (including regional
r.aspx? rural banks, small finance banks and local area banks), co-
Mode=0&Id=1 operative banks, All-India Financial Institutions, and Non-banking
1902 Financial Companies (including housing finance companies)
(“lending institutions”) are permitted to extend the moratorium by
another three months i.e. from June 1, 2020 to August 31, 2020 on
payment of all instalments in respect of term loans (including
agricultural term loans, retail and crop loans). Accordingly, the
repayment schedule for such loans as also the residual tenor, will
be shifted across the board. Interest shall continue to accrue on
the outstanding portion of the term loans during the moratorium
period.

3. In respect of working capital facilities sanctioned in the form of

cash credit/overdraft (“CC/OD”), lending institutions are permitted
to allow a deferment of another three months, from June 1, 2020 to
August 31, 2020, on recovery of interest applied in respect of all
such facilities. Lending institutions are permitted, at their
discretion, to convert the accumulated interest for the deferment
period up to August 31, 2020, into a funded interest term loan
(FITL) which shall be repayable not later than March 31, 2021.

(ii) Easing of Working Capital Financing

4. In respect of working capital facilities sanctioned in the form of

CC/OD to borrowers facing stress on account of the economic
fallout of the pandemic, lending institutions may, as a one-time
measure,

(i) recalculate the ‘drawing power’ by reducing the margins till

August 31, 2020. However, in all such cases where such a
temporary enhancement in drawing power is considered, the
margins shall be restored to the original levels by March 31, 2021;
and/or,

(ii) review the working capital sanctioned limits upto March 31,
2021, based on a reassessment of the working capital cycle.

5. The above measures shall be contingent on the lending

institutions satisfying themselves that the same is necessitated on
account of the economic fallout from COVID-19. Further, accounts
provided relief under these instructions shall be subject to
subsequent supervisory review with regard to their justifiability on
account of the economic fallout from COVID-19.

6. Lending institutions may, accordingly, put in place a Board

approved policy to implement the above measures.

Asset Classification

7. The conversion of accumulated interest into FITL, as permitted

in terms of paragraph 3 above, and the changes in the credit terms
permitted to the borrowers to specifically tide over economic fallout
from COVID-19 in terms of paragraph 4 above, will not be treated
as concessions granted due to financial difficulty of the borrower,
under Paragraph 2 of the Annex to the Reserve Bank of India
(Prudential Framework for Resolution of Stressed Assets)
Directions, 2019 dated June 7, 2019 (‘Prudential Framework’),
and consequently, will not result in asset classification downgrade.

8. In respect of accounts classified as standard as on February 29,

2020, even if overdue, the moratorium period, wherever granted in
respect of term loans, shall be excluded by the lending institutions
 from the number of days past-due for the purpose of asset
classification under the IRAC norms. The asset classification for
such accounts shall be determined on the basis of revised due
dates and the revised repayment schedule.

9. Similarly, in respect of working capital facilities sanctioned in the

form of cash credit/overdraft (“CC/OD”), where the account is
classified as standard, including SMA, as on February 29, 2020,
the deferment period, wherever granted in terms of paragraph 3
above shall be excluded for the determination of out of order
status.

10. All other provisions of circulars dated March 27, 2020 and April

17, 2020 shall remain applicable mutatis mutandis.

https:// June III. Measures to Ease Financial Stress

www.rbi.org.in 10,2020
/scripts/ The intensification of COVID-19 disruptions has imparted priority to
BS_ViewBulleti relaxing repayment pressures and improving access to working
capital by mitigating the burden of debt servicing, prevent the
n.aspx? transmission of financial stress to the real economy, and ensure
Id=18993 the continuity of viable businesses and households.

6. Moratorium on Term Loan Instalments

On March 27, 2020, the RBI permitted all commercial banks

(including regional rural banks, small finance banks and local area
banks), co-operative banks, all-India Financial Institutions, and
NBFCs (including housing finance companies and micro- finance
institutions) (referred to hereafter as “lending institutions”) to allow
a moratorium of three months on payment of instalments in
respect of all term loans outstanding as on March 1, 2020. In view
of the extension of the lockdown and continuing disruptions on
account of COVID-19, it has been decided to permit lending
institutions to extend the moratorium on term loan instalments by
another three months, i.e., from June 1, 2020 to August 31, 2020.
Accordingly, the repayment schedule and all subsequent due
dates, as also the tenor for such loans, may be shifted across the
board by another three months.

7. Deferment of Interest on Working Capital Facilities

In respect of working capital facilities sanctioned in the form of

cash credit/overdraft, lending institutions are being permitted to
allow a deferment of another three months, from June 1, 2020 to
August 31, 2020, in addition to the three months allowed on March
27, 2020 on payment of interest in respect of all such facilities
outstanding as on March 1, 2020.

8. Payment of Interest on Working Capital Facilities for the

Deferment Period

In order to ameliorate the difficulties faced by borrowers in

repaying the accumulated interest for the deferment period on
working capital facilities in one shot, lending institutions are
permitted to convert the accumulated interest on working capital
facilities over the deferment period (up to August 31, 2020) into a
funded interest term loan which shall be repayable not later than
the end of the current financial year (i.e., March 31, 2021).

Lending institutions may, accordingly, put in place a Board

approved policy to implement the measures announced in para 6,
7, 8.

9. Asset Classification

(i)As the moratorium/deferment is being provided specifically to

enable borrowers to tide over COVID-19 disruptions, the same will
not be treated as changes in terms and conditions of loan
agreements due to financial difficulty of the borrowers and,
consequently, will not result in asset classification downgrade.

(ii)As earlier, the rescheduling of payments on account of the

moratorium/deferment will not qualify as a default for the purposes
of supervisory reporting and reporting to credit information
companies (CICs) by the lending institutions. CICs shall ensure
that the actions taken by lending institutions in pursuance of the
announcements made today do not adversely impact the credit
history of the borrowers.

(iii) In respect of all accounts for which lending institutions decide

to grant moratorium/deferment, and which were standard as on
March 1, 2020, the 90-day NPA norm shall also exclude the
extended moratorium/deferment period. Consequently, there
would be an asset classification standstill for all such accounts
during the moratorium/deferment period from March 1, 2020 to
August 31, 2020. Thereafter, the normal ageing norms shall apply.

(iv) NBFCs, which are required to comply with Indian Accounting

Standards (IndAS), may follow the guidelines duly approved by
their Boards and advisories of the Institute of Chartered
Accountants of India (ICAI) in recognition of impairments. Thus,
NBFCs have flexibility under the prescribed accounting standards
to consider such relief to their borrowers.

10. Easing of Working Capital Financing

(i)In respect of working capital facilities sanctioned in the form of

cash credit/overdraft, lending institutions are permitted to
recalculate the ‘drawing power’ by reducing the margins till the
extended period, i.e., August 31, 2020. In order to smoothen the
impact for the borrowers, lending institutions are permitted to
restore the margins to the original levels by March 31, 2021.

(ii)Further, lending institutions are permitted to reassess the

working capital cycle of a borrowing entity up to an extended
period till March 31, 2021. This will provide necessary leeway to
the lenders to make an informed assessment about the impact of
the pandemic on the entity concerned.

(iii) Such changes in credit terms permitted to the borrowers to

specifically tide over COVID-19’s fallout will not be treated as
concessions granted due to financial difficulty of the borrower,
under Paragraph 2 of the Annex to the Reserve Bank of India
(Prudential Framework for Resolution of Stressed Assets)
Directions, 2019 dated June 7, 2019 (‘Prudential Framework’),
and consequently, will not result in asset classification downgrade.