The guidelines on the KV Kamath committee recommendations will be out by September 6,Reserve Bank of india(RBI) governor SK Das said in a television interview on Friday.
The committee on business loan resolution would submit its recommendations within one month and the central bank will soon release its final guidelines on the issue. Both the process will be done within 30 days from the date of original notification on August 6, Das said in an interview Media.
The committee will look after business loans above Rs 1,500 crore, while retail loan resolution will be taken care of by bank boards.
Banks can meanwhile start the process on its own, and the governor said in the interview the bank board will be prepared with the resolution plan by the end of this month.
There was some confusion if the RBI would take another 30 days after submission of recommendation of the Kamath committee, but that concern has been addressed now.
However, considering that at least one member Diwakar Gupta will be joining the committee after the completion of his tenure at Asian Development Bank (ADB) on September 1, the committee will literally get just a few days to finalise its recommendations working full strength.
Das said chief executive officers’ tenure doesn’t decide the fortunes of a bank, as some leaders had long tenure but even then the lender failed.
He said the reason why the central bank had not put out key growth numbers is because the coronavirus pandemic had created economic uncer.
“RBI numbers should be dependable. We are not playing safe, let us have some clarity on the present situation, let the Covid (19) curve flatten–inflation and GDP numbers can be given that time. We didn’t have that clarity, so we are just giving directional guide,” he said.
“The fundamentals of Indian economy are very solid and the economy will surely revive as and when there is a certainty on the covid-curve stabilizing. The RBI stands battle ready, all conventional and unconventional instruments, as well as some new ones are also there on our table. We will use them when needed.”
About transmission of rate cuts, he said: “whenever there is any intervention needed, we will do that, but when and what I can’t say that,” the governor said.
The central bank is the government’s debt manager and it is committed to conduct borrowing in a non-disruptive manner. “Whatever happens in the market doesn’t escape the regulator, but the RBI takes action if the market behavior in any segment hits the financial stability. That’s why the central bank opened a Rs 50,000 crore liquidity window for mutual funds when Franklin Templeton faced liquidity issue, and the mutual fund industry stabilized. “