Exposure for small borrowers under Resolution Framework 2.0 doubled to Rs 50 crore

The Reserve Bank of India (RBI) on Friday announced a doubling of the maximum aggregate exposure to Rs 50 crore in a bid to expand the coverage of the Resolution Framework 2.0.   

“With a view to enabling a larger set of borrowers to avail (sic) of the benefits under Resolution Framework 2.0, it has been decided to expand the coverage of borrowers under the scheme by enhancing the maximum aggregate exposure threshold from Rs 25 crore to Rs 50 crore for MSMEs, non-MSME small businesses and loans to individuals for business purposes,” RBI Governor Shaktikanta Das said on Friday as a part of the Monetary Policy Statement.

The Resolution Framework 2.0 was announced by the RBI on May 5 to help small borrowers tide over the impact of the second wave of COVID-19 pandemic and lockdowns. 

“The above categories of borrowers to whom the lending institutions have aggregate exposure of not more than Rs 50 crore as on March 31, 2021, and which have not been restructured earlier under any of the specified restructuring frameworks, shall be eligible to be considered for resolution under Resolution Framework 2.0,” said the Statement on Developmental and Regulatory Policies. All other conditions shall remain the same, the statement added.

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