FHRAI urges RBI to extend loan restructuring program to all hospitality players
NEW DELHI: The Federation of Hotel and Restaurant Associations of India (FHRAI) urged Reserve Bank of India Governor Shaktikanta Das to open special window for loan restructuring in India. tourism and hospitality sector. The association sought specific adjustments under the RBI’s Resolution 2.0 framework.
He also urged the central bank to extend the benefit of the restructuring of loans under Framework Resolution 2.0 to those who had requested under Framework Resolution 1.0 but were unable to take advantage of it.
Gurbaxish Singh Kohli, Vice President of FHRAI, said the industry body has welcomed the RBI’s Resolution Framework 2.0 which allows individuals, small businesses and borrowers, as well as MSMEs, exposure going up to ₹25 crore.
“However, the restructuring recommendations of the Kamath Committee made the restructuring plan unfavorable for the hospitality industry. The discretionary powers granted to credit institutions by the RBI as part of the loan restructuring program have not relieved the players in the hotel industry. Credit institutions are reluctant or impose unreasonable conditions to profit from restructuring. We are asking for a special restructuring window for the tourism and hospitality sector which provides for the removal of the Rs.25 crore ceiling for restructuring, ”he added.
As part of Resolution 2.0, RBI ordered that the accounts be classified as standard as of March 31, 2021 to be eligible for restructuring. The FHRAI underlined that this condition goes against the hotels and restaurants which had already applied within the framework of the resolution 1.0.
“In view of the appalling situation in the hospitality industry, we call on the RBI to extend the benefit of restructuring loans to all, including those who had requested restructuring under Framework Resolution 1.0. The RBI must remove the condition requiring that accounts be classified as standard as of March 31, ”said DVS Soma Raju, FHRAI Treasurer.
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