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on overdue filings of small businesses.
• On June 21, 2020, the RBI directed banks to assign zero per cent risk weight on the credit
facilities extended under the Emergency Credit Line Guarantee Scheme.
• On August 6, 2020, RBI permitted banks to restructure existing loans to MSMEs classified
as ‘standard” (as of March 1, 2020) without a downgrade in the asset classification. The
restructuring of the borrower account is to be implemented by March 31, 2021. Banks are
required to maintain additional provision of five per cent over and above the provision
already held by them for accounts restructured.
• The RBI also announced a resolution plan for corporate and personal loans that were
classified as ‘standard’ as of March 1, 2020 but were stressed due to COVID-19. Resolution
needed to be invoked by end-December 2020 and the eligible loans continue to be classified
as ‘standard’ until the implementation of the resolution plan. Ten per cent provisioning
was required following the implementation of the resolution plan.
• On August 31, 2020, banks are allowed to hold fresh acquisitions of SLR securities acquired
from September 1, 2020, under held-to-maturity up to an overall limit of 22 per cent through
March 31, 2021.
• On September 22, 2020, the Parliament adopted the amendment to the Indian Bankruptcy
Code (IBC), with no insolvency cases until December 25, 2020. The suspension of the IBC
was later extended until end-March 2021.
• On October 9, 2020, the RBI announced that the risk weights for new housing loans
sanctioned until March 31, 2022, will not be linked to the size of the loan, while they will
remain linked to the LTV ratios; the maximum single counterparty exposure limit for retail
loans by banks was eased from `5 to `7.5 crore.
• The RBI announced Open Market Operations of state government securities on October 16,
2020. On-tap TLTROs up to three years tenor for a total amount of up to `1,00,000 crore at
a floating rate linked to the policy repo rate were announced on October 21, 2020.
• The Government extended the Emergency Credit Line Guarantee Scheme (ECLGS) for
MSMEs first till November 30th, 2020, then March 31, 2021, and now till September 30,
2021, while at the same time relaxing the eligibility criteria.
• The RBI has extended the Liquidity Adjustment Facility and the Marginal Standing Facility
to the Regional Rural Banks to improve their liquidity management since December 2020.
Annual Report 2020-21 | 193
• On June 21, 2020, the RBI directed banks to assign zero per cent risk weight on the credit
facilities extended under the Emergency Credit Line Guarantee Scheme.
• On August 6, 2020, RBI permitted banks to restructure existing loans to MSMEs classified
as ‘standard” (as of March 1, 2020) without a downgrade in the asset classification. The
restructuring of the borrower account is to be implemented by March 31, 2021. Banks are
required to maintain additional provision of five per cent over and above the provision
already held by them for accounts restructured.
• The RBI also announced a resolution plan for corporate and personal loans that were
classified as ‘standard’ as of March 1, 2020 but were stressed due to COVID-19. Resolution
needed to be invoked by end-December 2020 and the eligible loans continue to be classified
as ‘standard’ until the implementation of the resolution plan. Ten per cent provisioning
was required following the implementation of the resolution plan.
• On August 31, 2020, banks are allowed to hold fresh acquisitions of SLR securities acquired
from September 1, 2020, under held-to-maturity up to an overall limit of 22 per cent through
March 31, 2021.
• On September 22, 2020, the Parliament adopted the amendment to the Indian Bankruptcy
Code (IBC), with no insolvency cases until December 25, 2020. The suspension of the IBC
was later extended until end-March 2021.
• On October 9, 2020, the RBI announced that the risk weights for new housing loans
sanctioned until March 31, 2022, will not be linked to the size of the loan, while they will
remain linked to the LTV ratios; the maximum single counterparty exposure limit for retail
loans by banks was eased from `5 to `7.5 crore.
• The RBI announced Open Market Operations of state government securities on October 16,
2020. On-tap TLTROs up to three years tenor for a total amount of up to `1,00,000 crore at
a floating rate linked to the policy repo rate were announced on October 21, 2020.
• The Government extended the Emergency Credit Line Guarantee Scheme (ECLGS) for
MSMEs first till November 30th, 2020, then March 31, 2021, and now till September 30,
2021, while at the same time relaxing the eligibility criteria.
• The RBI has extended the Liquidity Adjustment Facility and the Marginal Standing Facility
to the Regional Rural Banks to improve their liquidity management since December 2020.
Annual Report 2020-21 | 193
