HospitalityBiz India
Hotels FoodService Operations Ministry Associations Equipment Editorial HR Technology Technology Advisory Board Community
Follow us on Facebook Follow us on Twitter instagram
    Home > NewsTrack

KV Kamath-led committee picks 26 sectors including tourism, aviation & hotels for loan restructuring

Tuesday, September 8, 2020, 12:30 Hrs  [IST]

A week after Finance Minister Nirmala Sitharaman asked banks and non-banking financial companies (NBFCs) to roll out a loan restructuring scheme for companies facing Covid-19-related stress, the Reserve Bank of India (RBI)-committee led by KV Kamath on Monday announced the financial parameters for the resolution plans under the scheme.


In its report the five member committee said power, construction, iron and steel, roads, real estate, wholesale trading, textiles, consumer durables, aviation, logistics, hotels, restaurants and tourism, mining are among the sectors that will need restructuring. The committee selected five financial parameters related to leverage, liquidity, debt serviceability etc.


The committee has made recommendations for 26 sectors that could be factored by lending institutions while finalizing loan resolution plans. The committee said banks could adopt a graded approach based on the severity of the coronavirus pandemic in a sector.


These ratios are total outside liabilities to adjusted tangible net worth, debt to EBITDA (earnings before interest, tax, depreciation and amortisation), current ratio, debt service coverage ratio (DSCR) and average DSCR. These ratios monitor how leveraged are companies, their cash flows and whether they can regain their ability to service debt.


The scheme was announced to bail out companies and organisations hit by the coronavirus and follow-up lockdowns. The central bank's announcement is based on the recommendations of the K V Kamath committee, which submitted its report last week.


The RBI had initially allowed lenders to grant a loan moratorium for three months on equated monthly instalments (EMIs) falling due between March 1 and May 31, 2020. Later, it had extended this for another three months until August 31. To manage the financial stress amid the lockdown, RBI had also permitted lenders a one-time restructuring of loans without classifying these as non-performing assets.

A high proportion of debt from the real estate, airlines, hotels, and other consumer discretionary sectors had been restructured, the largest contribution had been from infrastructure, power, and construction. The restructuring quantum from the corporate sector in FY21 could range between 3 per cent and 5.8 per cent of the banking credit, amounting to Rs 3.3-6.3 trillion, India Ratings said in a report. Even stressed assets that might not slip in the near term could be restructured, as Covid-19 would have aggravated stress.

 (Source: Media Reports)

(Source: Media Reports)

Print News Email News Back
Bookmark to Add to NewsvineNewsvine Bookmark with Digg ItDigg
Add RSS to Add to Google Add to My Yahoo! Subscribe with Bloglines Subscribe
* Name :    
* Email :    
* Message :  
»  Sayaji Hotels Ltd. appoints Girish Menon as Associate Director - Development
»  HAI asks Delhi Government to keep “Classified” Hotels out of the purview of the New Excise Policy
»  Pride Group of Hotels joins as Festive Partner for the 19th Pune International Film Festival.
»  The Fern Hotels & Resorts opens their 19th hotel in Maharashtra with the opening of E-Square The Fern-An Ecotel Hotel, Pune
»  Kamat Hotels (India) LTD. Presented With Maharashtra State Best Employer Brand Awards 2021
»  Hospitality Industry Awaits Govt. To Notify Rs.60,000 Cr Loan Guarantee Scheme; FHRAI Requests FM’s Urgent Intervention
»  Sayaji Hotels Limited announces strategic partnership with a majority stake in Intellistay Hotels
»  Pride Group of Hotels signs up Pride Resort Aatapi Wonderland in Gujarat
»  Apeejay Surrendra Park Hotels Limited and Laxmi Nivasam Developers announce their collaboration for developing Zone Connect Yadagirigutta
»  Chaliyar River Paddle 2021 successfully concludes with an objective to boost tourism in Kerala
»  Kerala Tourism Department to open more ‘Foodie Wheels’ restaurants in State
»  Zone by THE Park Hotels appoints Kiron Nair as the new Director-Operations
»  Roseate Hotels & Resorts organises ‘Lost recipes of India’ food festival
»  Marriott International signs agreement with Prestige Group to open two new hotels in Delhi
»  The Nazir Hoosein Memorial Drive Flagged Off From Welcomhotel By ITC Hotels, The Savoy, Mussoorie
»  IHG Hotels & Resorts introduces IHG Business Edge program for the MSME sector
»  Fortune Hotels opens Fortune Resort Benaulim Goa
»  Malini Menon takes over as General Manager - Sales & Marketing (South India) for The Fern Hotels & Resorts
»  Loan default by parent firm, Yes Bank takes possession of Hyatt Regency building
»  Pride Group of Hotels has signed up to launch four new properties in the state of Uttarakhand
  The Indian Institute of Architects (IIA) Natcon 2020 virtual event concludes successfully
  Winners of The Park Elle Décor Student Contest felicitated at Indian Design ID 2020
Receive the best of Hospitality content in your mailbox.
Weekly e-Newsletter
Events Calendar

© Copyright 2016 Saffron Synergies Pvt Ltd