The Managing Directors/CEO's/Owners/Director/Partners/General Managers        
All FHRAI Members      

CC:      All Members of the Executive Committee
             All Regional Associations          

Sub:- Financial Parameters for Resolution Framework for COVID-19-related Stress

Dear Member,

As you are aware, The Reserve Bank on August 7, 2020, announced the constitution of an Expert Committee under the chairmanship of Shri K.V. Kamath to make recommendations on the required financial parameters to be factored in the resolution plans under the “Resolution Framework for Covid 19 related Stress” along with sector specific benchmark ranges for such parameters.

The Committee has recommended financial parameters that, include aspects related to leverage, liquidity and debt serviceability. The Committee has recommended financial ratios for 26 sectors which could be factored by lending institutions while finalizing a resolution plan for a borrower.

The recommendations of the Committee have been broadly accepted by the Reserve Bank. Accordingly, a follow up circular to the Resolution Framework guidelines announced in August 6, 2020, has been issued by the Reserve Bank on September 7th 2020, specifying five specific financial ratios and the sector-specific thresholds for each ratio in respect of 26 sectors to be taken into account while finalising the resolution plans.

Report of Shri K V Kamath Committee and the circular of RBI dated 7th September, 2020 with Financial Parameters  for Resolution Framework for COVID-19-related Stress, are enclosed for your kind reference.

You  are hereby requested to provide your valuable inputs  on the revised circular of RBI and the proposed Resolution Plan to enable us to doing the needful. Please send your inputs by email to sg@fhrai.com at the earliest.

With best regards,

Jaison Chacko
Secretary General
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The Federation of Hotel & Restaurant Associations of India
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