Search Your Queries Related To Trilegal


RBI’s Resolution Framework for COVID-19 Related Stress

01 Sep 2020

Banking-Finance-Regulatory-Enforcement-Capital-Market-Asset finance regulatory enforcement capital market asset management tax thumb image
The Reserve Bank of India has issued a 'Resolution Framework for COVID-19 Related Stress'. It provides for a window to allow lending institutions to implement a resolution plan for accounts which would have had a good track record but for the COVID-19 pandemic, without requiring a change in ownership, while classifying such exposures as standard assets.


The Reserve Bank of India (RBI) has been considering various measures to provide a much needed breathing space to borrowers and lenders due to the prevailing COVID-19 related financial distress and has on 6 August 2020 issued the ‘Resolution Framework for COVID-19 Related Stress’ (Special Framework). The Special Framework provides a window under the existing RBI (Prudential Framework for Resolution of Stressed Assets) Directions, 2019 dated 7 June 2019 (Prudential Framework) enabling lending institutions (Lenders) to implement a resolution plan for personal loans and corporate exposures, without requiring a change in ownership while continuing to classify such exposures as standard assets. It has also broadened the ambit of Lenders to include all non-banking financial companies (NBFCs) and housing finance companies.

The Special Framework

  • Eligible Borrowers

    The Special Framework broadly identifies the class of personal loans and other set of loans (Other Loans), which will have access to the relief measures as set out under the Special Framework. Personal loans (classified under RBI’s Circular dated 4 January 2018 on XBRL Returns – Harmonization of Banking Statistics) are essentially loans to individual borrowers for consumer credit, education loans, housing loans and loans for investment in financial assets. All exposures that are covered under the Special Framework and some key exposures that are excluded are broadly described below:

    Exposures covered Borrowers who would have had a good track record but for the COVID-19 pandemic are covered. The reference date for examining the performance of a borrower is 1 March 2020, i.e. only those loan accounts which were classified as standard and had not been in default for more than 30 days as on 1 March 2020, are eligible to be resolved under the Special Framework.
    Exposures excluded –  Loans to financial service providers.
    –  Loans to central and state governments, local government bodies and body corporates established under a legislation.
    –  Micro, small and medium enterprises (MSME) borrowers whose aggregate exposure to all its lending institutions collectively is INR 250 million or less as on 1 March 2020.
    –  Loans provided by Lenders to their own personnel/staff.
    –  Loan accounts which are not classified as standard as on the date of invocation of the resolution process.
Download PDF to read more

Subscribe to our Knowledge Repository

If you would like to receive content directly in your inbox from our knowledge repository, please complete this subscription form. This service is reserved for clients and eligible contacts.


    Under the rules of the Bar Council of India, Trilegal is prohibited from soliciting work or advertising in any form or manner. By accessing this website,, you acknowledge that:

    • You are seeking information about Trilegal of your own accord and there has been no form of solicitation, advertisement or inducement by Trilegal or its members.
    • This website should not be construed as providing legal advice for any purpose.
    • All information, content, and materials available on this website are for general informational purposes only.
    • Any information obtained or material downloaded from this website is completely at the user’s volition, and any transmission, receipt or use of this website is not intended to, and will not, create any lawyer-client relationship.
    • Information on this website may not constitute the most up-to-date legal or other information. Trilegal is not liable for the consequences of any action taken by any person based on any material or information available on this website, or for any inaccuracy in or exclusion of any information or interpretation thereof.
    • Readers of this website or recipients of content or information available on this website should not act based on any or all such content or information, and should always seek advice of competent legal counsel licensed to practice in the appropriate jurisdiction.
    • Third party links contained on this website re-directing users to such third-party websites should neither be construed as legal reference / legal advice, nor considered as referrals to, endorsements of, or affiliations with, any such third party website operators.
    • The communication platform provided on this website should not be used for exchange of any confidential, business or politically sensitive information.
    • The contents of this website are the intellectual property of Trilegal.

    We prioritize your privacy. Before proceeding, we encourage you to read our privacy policy, which outlines the below, and terms of use to understand how we handle your data:

    • The types of information we collect and why we collect them.
    • How we use your information to provide a personalized experience.
    • The measures we take to ensure the security of your data.
    • Your rights and choices in managing your personal information.
    • How we may share information with trusted partners for specific purpose.

    For more information, please read our terms of use and our privacy policy.

    Up arrow