Resolution Framework 2.0 (Individuals, Small Business & MSME Borrowers) - Policy Guidelines
Eligible Borrowers - Individuals and small businesses
Individuals and Small Businesses who have availed personal loans or business loans
Having aggregate exposure not more than Rs.25 crore as on March 31, 2021, from all lending institutions
Have not availed of any resolution under the Resolution Framework - 1.0
Provided, these credit facilities are classified as Standard as on March 31, 2021.
Resolution plans
Rescheduling of payments
Conversion of any interest accrued or to be accrued into another credit facility
Granting of moratorium for a maximum of two years
Extension of the residual tenor of the loan facilities, with or without payment moratorium. The overall cap on extension of residual tenor, shall be two years.
MSME Borrowers
The borrowing entity should be is GST-registered on the date of implementation However, this condition will not apply to MSMEs that are exempt from GST-registration. This shall be determined on the basis of exemption limit obtaining as on March 31, 2021
Aavas shall provide one time facility for restructuring existing loans without a downgrade in the asset classification
Asset Classification
the asset classification of the borrower's accounts shall be standard
Any account, if slipped in to NPA between invocation and implementation, may be upgraded as standard
Disclosure and Credit Reporting
Disclosures to be made as per the prescribed format in financial statements for the quarters ending September 30, 2021 and December 31, 2021
The credit reporting of borrowers where the resolution plan is implemented shall reflect the "restructured due to COVID- 19". The credit history of the borrowers shall consequently be governed by the respective policies of the credit information companies as applicable to accounts that are restructured.
Timelines
This framework can be invoked not later than Sep 30, 2021
Implementation of Resolution Plan - Within 90 days from date of Invocation
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