Resolution framework to give durable relief to borrowers facing COVID-19 related stress
Aug 27, 2020
Mumbai (Maharashtra) [India], Aug 27 : While the Reserve Bank of India's (RBI's) moratorium on repaying loans was a temporary solution in the context of COVID-19 lockdown, the resolution framework is expected to give a durable relief to borrowers facing the pandemic-related stress, Governor Shaktikanta Das said on Thursday.
However, after the containment of COVID-19, a very careful trajectory needs to be followed for an orderly unwinding of counter cycle measures taken by the RBI, he said. "The financial sector should return to normalcy without relying on relaxations and other measures as a new norm," said Das.
The RBI's response to the situation arising out of COVID-19 has been unprecedented. "But the measures taken are intended to deal with the specific situation of coronavirus and cannot be obviously permanent," he said while speaking at an event organised by a financial daily newspaper.
Das said that while green shoots are emerging and businesses are getting back to normalcy, it is hard to measure the impact of COVID-19 on the economy. The RBI has taken various steps like interest rate cuts and a moratorium on debt servicing.
But there has to be a calibrated, cautious exit plan for the long-term, he added.
