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RBI Draft Framework to Resolve Loans After Natural Disasters

6 February 20261 min read
BANKING & FINANCERBI Draft Frameworkto Resolve LoansAfter NaturalDisasters6 February 2026safalsetu.com

Why in the news

RBI drafted a framework asking lenders to restructure loans of disaster-hit borrowers on set principles.

Key facts

  • Regulated entities get full discretion in designing plans, and must factor disaster and climate risks into credit policies.
  • Applies to banks and all RBI-regulated entities.
  • Relief options: rescheduling, moratorium, converting accrued interest into a separate facility, extra finance.

Objectives

  • Build borrower resilience and avert sudden NPAs.
  • Bring climate risk into regulation while keeping prudential discipline.

Exam angle

  • Eligibility cut-off: 30 days of default.
  • Status: draft by RBI.

Test yourself

1. Under RBI's draft disaster-resolution framework, which borrowers are eligible for relief?

Eligibility covers borrowers who have not defaulted for more than 30 days.

2. Which of these is listed as a resolution measure in RBI's draft norms for natural-calamity borrowers?

Rescheduling, moratorium, interest conversion and additional finance are the listed measures.

3. What type of regime does RBI's draft calamity-borrower framework propose?

It is principle-based, giving regulated entities full discretion in plan design.

This topic is part of Daily Current Affairs 3 & 4 February 2026 (20 topics).

All topics of the dayDay quizFebruary 2026

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