RBI set up a committee headed by K.V. Kamath in 2020 on restructuring of loans impacted by the
Covid-19 pandemic.
The Committee was tasked to recommend parameters for one-time restructuring of corporate
loans.
It recommended graded approach to restructuring of stressed accounts based on severity of the impact
on the borrowers- Banks can classify the accounts into mild, moderate and severe as recommended
by the committee.
Also it suggested five financial parameters to gauge the health of sectors facing difficulties- total
outside liabilities to adjusted tangible networth, total debt to earnings before interest, taxes,
depreciation, and amortization (Ebitda), debt service coverage ratio (DSCR), current ratio and average
debt service coverage ratio (ADSCR).
K.V. Kamath Committee
Covid-19 pandemic.
loans.
on the borrowers- Banks can classify the accounts into mild, moderate and severe as recommended
by the committee.
outside liabilities to adjusted tangible networth, total debt to earnings before interest, taxes,
depreciation, and amortization (Ebitda), debt service coverage ratio (DSCR), current ratio and average
debt service coverage ratio (ADSCR).