New Delhi: The Reserve Bank of India (RBI) made it clear that borrowers facing difficulty in repaying loans due to Coronavirus can apply for settlement of the loan without making any concrete plan. In the FAQ on the questions arising in relation to the corona related difficulty, the central bank has said that borrowers can initiate this process by filing an application for resolution before the lending institutions.
The Reserve Bank of India has announced a separate settlement plan to help units unable to repay loan instalments due to disruptions in normal business due to circumstances arising out of Corona. The Reserve Bank has clarified that in such cases there is no need to submit a resolution plan with any application. For this, it is sufficient to submit an application to the lending institution, on the basis of which the debt resolution process can be started.
The lending institution on such applications will take a principled decision according to the debt resolution arrangement approved by its board of directors. After the decision is taken to initiate the settlement process under the prescribed arrangement, the lender will prepare a resolution plan in consultation with the borrower.
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