Page 531 - ES 2020-21_Volume-1-2 [28-01-21]

158 Economic Survey 2020-21 Volume 1

ANNEXURE 1

REGULATORY POLICY MEASURES IN RESPECT OF BANKS TO
MITIGATE THE IMPACT OF COVID-19 PANDEMIC

Date of Announcement Measures Announced

March 27, 2020 (i) Covid-19 Regulatory Package was announced; wherein lending
institutions were permitted to grant moratorium and deferment of
interest for three months i.e. March 01, 2020 to May 31, 2020 in respect
of instalments of term loans and working capital sanctioned in the form
of Cash Credit/Overdraft respectively on the outstanding as on March
1, 2020;

(ii) The implementation of NSFR guidelines, which were to come into effect
from April 1, 2020 onwards was deferred by six months to October 1,
2020 dated March 27, 2020;
(iii) The implementation of the last tranche of 0.625 per cent of Capital
Conservation Buffer (CCB) was deferred from March 31, 2020 to
September 30, 2020.

April 01, 2020 Deferment of activation of Counter-cyclical Capital Buffer (CCyB) for a
period of one year or earlier, as may be necessary, based on the review and
empirical analysis of CCyB indicators.

April 17, 2020 (i) Temporary reliefs were provided regarding resolution of stressed
assets in the form of extension of timeline for review period and
resolution period for accounts in review period and under resolution
without additional provisions as on March 01, 2020 respectively;
(ii) Certain reliefs was provided regarding asset classification for accounts
where the moratorium permitted in terms of the earlier circular dated
March 27, 2020 has been granted, while concomitantly tightening the
provisioning requirements to ensure the banks are well provisioned to
meet any potential slippages;
(iii) All banks shall not make any further dividend payouts from the profits
pertaining to the financial year ended March 31, 2020 until further
instructions;
(iv) Measures regarding prudential liquidity requirements were
announced:
a. Entire SLR-eligible assets held by banks are now permitted to be
reckoned as HQLAs for meeting LCR.
b. In order to accommodate the burden on banks’ cash flows, banks
were permitted to maintain LCR as under:
• From date of circular to September 30, 2020 - 80 per cent
• Oct 1, 2020 to March 31, 2021 - 90 per cent;
• April 1, 2021 onwards - 100 per cent.