FHRAI said that the industry body welcomes the RBI Resolution Framework 2.0 which allows individuals, small businesses and borrowers, and MSMEs exposure of up to Rs.25 crore
FHRAI also urged the central bank to extend the benefit of loan restructuring under Resolution Framework 2.0 to those who had applied for it under Resolution Framework 1.0 but were unable to avail of it.
Federation of Hotel & Restaurant Associations of India (FHRAI) has urged Reserve Bank of India governor Shaktikanta Das to introduce a special window for restructuring of loans to the tourism and hospitality sector. The association has sought specific tweaks in the RBI’s Resolution Framework 2.0.
It also urged the central bank to extend the benefit of loan restructuring under Resolution Framework 2.0 to those who had applied for it under Resolution Framework 1.0 but were unable to avail of it.
Gurbaxish Singh Kohli, vice president, FHRAI said the industry body welcomed the RBI’s Resolution Framework 2.0 which allows individuals, small businesses, and borrowers, and MSMEs exposure of up to ₹25 crores.“However, the Kamath Committee recommendations for restructuring have made the restructuring plan unfavorable for the hospitality industry.
Discretions provided to lending institutions by the RBI in the loan restructuring scheme have provided no relief to hospitality players. Lending institutions are either reluctant or impose unreasonable conditions to avail the restructuring. We request for a special restructuring window for the tourism and hospitality sector that provisions the removal of Rs.25 crores cap for restructuring,” he added.
In the Resolution Framework 2.0, RBI has mandated accounts be classified as standard as of 31 March 2021 to be eligible for restructuring. FHRAI has pointed out that this condition goes against hotels and restaurants that had already applied under the Resolution Framework 1.0.
“In view of the abysmal situation of the hospitality sector, we request the RBI to extend the benefit of loan restructuring to all including those who had applied for restructuring under Resolution Framework 1.0. The RBI needs to remove the condition requiring accounts to be classified as standard as on 31 March,” said D V S Soma Raju, treasurer, FHRAI.
