Tag: Debt Distress

In the wake of COVID-19 related lockdown and the resultant impact on the financial lives of millions of households, the Reserve Bank of India (RBI) approved a series of regulatory measures, which among others, enabled lending institutions to provide their borrowers with a 6 month-repayment moratorium on term loans. A debt moratorium at this scale […]

Personal insolvency needs to be treated as a social insurance option. A mechanism which relies on the interaction between creditors and borrowers must be put in place

This problem can be solved by link-ups with large supply chains and networks that disperse risk and place small businesses in a better position to get loans and attract equity investors.

Given the extent of liquidity shock caused by Covid-19, the Reserve Bank of India enabled all lending institutions to provide their borrowers with a repayment moratorium on term loans until 31 August 2020.

The provisions for insolvency, bankruptcy and fresh start for natural persons as contained in the Insolvency and Bankruptcy Code (IBC) 2016 are expected to shift the paradigm of the Indian consumer credit market.

Three issues that the RBI must prioritize as it seeks to revise MFI regulations. While the prescriptive nature of these regulations has helped by setting in place core systems, processes and an overall structure towards better compliance, there is a growing concern over the capability of the current regime to effectively protect borrowers from over-indebtedness.

India is a bank-dominated financial system with most of the financial assets belonging to the banking sector.

Summary of process innovations aimed at addressing concerns of household over-indebtedness and the subsequent stress experienced by members of the household.

Learnings from the European context.

Research Brief for Practitioners and Policymakers