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Resolution Framework 2.0: Resolution of COVID-19 stress for Individuals and Small Businesses (other than MSME)

RBI vide notification DOR.STR.REC.11/21.04.048/2021-22 dated 05.05.2021 issued guidelines on Resolution Framework – 2.0: Resolution of Covid-19 related stress of Individuals and Small Businesses (other than MSME).

The following are the policy guidelines adopted by Bank with regard to implementation of the Resolution Framework 2.0 as per the Board approved policy of the Bank. (Personal Loans and Small Business Loans).

Particulars

Resolution framework 2.0 Norms

Eligible Borrowers 

  • Borrowers having stress on account of Covid19.
  • Borrower accounts shall be eligible for resolution under this framework which were classified as standard as on 31.03.2021.

Eligibility as per resolution

  • The credit facility / investment exposure to the borrower shall be standard as on 31.03.2021.
  • The following borrowers (standard as on 31.03.2021) shall be eligible for resolution plan under the Framework 2.0

 

1. Individual (Personal) Loans: The Resolution Framework 2.0 is applicable to Individuals who have availed Personal Loans from the Bank. Personal loans as defined in the Circular DBR.No.BP.BC.99/08.13.100 /2017-18 dated January 4, 2018 on “XBRL Returns – Harmonization of Banking Statistics”, which is as under; Personal loans refer to loans given to individuals and consist of

  • a) Consumer credit *,
  • b) Education loan,
  • c) Loans given for creation/ enhancement of immovable assets (e.g., housing, etc.), and
  • d) Loans given for investment in financial assets (shares, debentures, etc.).

*Consumer credit refers to the loans given to individuals, which

Consists of

  • a) Loans for consumer durables,
  • b) Credit card receivables,
  • c) Auto loans (other than loans for commercial use),
  • d) Immovable property, shares and bonds, etc., (other than for business / commercial purposes),
  • e) Personal loans to professionals (excluding loans form business purposes), and
  • f) Loans given for other consumptions purposes (e.g., social ceremonies, etc.)

The Resolution Framework 2.0 is not applicable to loans/ credit facilities sanctioned by the Bank to its own staff / personnel.

 

2. Individual Loans for business purposes: Individuals who have availed of loans and advances for business purposes and to whom the lending institutions have aggregate exposure of not more than Rs.25 crore as on March 31, 2021.

3. Small Business Loans: Small businesses, including those engaged in retail and wholesale trade, other than those classified as Micro, Small and Medium enterprises as on March 31, 2021, and to whom the lending institutions have aggregate exposure of not more than Rs.25 Crore as on March 31, 2021.

 

Disposal of application

Decision on the application shall be communicated in writing to the applicant within 30 days of receipt of application.

Implementation of Resolution

The resolution plan should be implemented within 90 days from the date of invocation.

Moratorium Period allowed.

Maximum Two years.

Extension of Loan Tenor

  • The overall cap on extension of residual tenor inclusive of moratorium period if any permitted, shall be maximum two years.
  • The extension of the residual tenor of the loan facilities may also be granted to borrowers, with or without payment moratorium.

Extension of Resolution Framework 1.0

  • In case of loans of borrower, where resolution plans had permitted  no moratorium or moratorium of less than two years and / or extension of residual tenor by a period of less than two years,

 

  • Bank Branch can modify such plans only to the extent of increasing the period of moratorium / extension of residual tenor subject to cap of maximum 24 months, and the consequent changes necessary in the terms of the loan for implementing such extension.

 

  • The overall caps on moratorium and / or extension of residual tenor granted under Resolution Framework – 1.0 and this framework combined, shall be two years.

Asset Classification

  • If a resolution plan is implemented as per guidelines, the asset classification of borrowers’ accounts classified as Standard shall be retained as such upon implementation
  • Borrowers’ accounts which may have slipped into NPA between invocation and implementation may be upgraded as Standard, as on the date of implementation of the resolution plan.

Contact Email id for grievance

  • Ritika.misra@mahabank.co.in
  • Pratik.patil@mahabank.co.in
  • Kinhsuk.bhowmick@mahabank.co.in

 

Request Letter for Resolution Framework 2.0

Offer cum Acceptance letter for Resolution framework 2.0 Over Draft

Offer cum Acceptance letter for Resolution framework 2.0 TERM LOANS

FAQ Resolution framework 2.0 circular

 

Please contact base Branch for further details.