Relaxation from default recognition due to restructuring of debt

By INSOL India - Editorial Team Posted On : October 29, 2020

Vide a circular dated August 31, 2020, the SEBI has extended the relaxation from default recognition by credit rating agencies due to restructuring of debt. The circular is in furtherance of the SEBI circular dated March 30, 2020 whereby the SEBI had provided such relaxation owing to moratorium permitted by the RBI and the Covid-19 imposed lockdown. As such, if credit rating agencies are of the opinion that the restructuring is solely due to Covid-19 related stress on under the RBI Resolution Framework for Covid-19 Related Stress, they may not deem it to constitute a default event. This relaxation has been granted until December 31, 2020.