The Reserve Bank of India (RBI) has permitted a one-time restructuring of loans to help companies to manage the financia

1. Debt | Equity | Advisory | Training | TEV | A Summary of RBI’s One Time Restructuring Scheme for Business Loans A Summary of RBI’s One Time Restructuring Scheme for Business Loans Dated August 6, 2020-(Scheme) Dated August 6, 2020-(Scheme)

2. Applicable for following Lending Institutions (LIs) Applicable for following Lending Institutions (LIs) Cooperative Banks NBFC Cooperative (Urban)/ State and District Central Banks- Primary All Commercial Banks AIFI NBFCs including HFCs 2 All India Financial Institutions

3. Some Important Dates Some Important Dates Reference Date March 1, 2020 The Date on which the Borrower and the Lending Institution(s) (LIs) agree to proceed with the resolution plan under the Scheme. The Invocation date should be on or before December 31, 2020. Invocation Date i. ii. December 31, 2020-if the Invocation does not happen by this date 180 days from the Invocation Date- if the Resolution Plan is not implemented iii. 30 days from Invocation Date -if ICA with requisite participation is not executed among the LIs. Expiry Date 3

4. Key Highlights of the Scheme Key Highlights of the Scheme Enables the lenders for resolution of eligible accounts, while continuation of “standard” classification/upgradation Available only to borrowers having stress caused by COVID 19 Requires Lending Institutions to have Board approved Policies for due diligence & eligibility  Mandatory Inter Creditor Agreement (for Multiple LIs) -also incentivises by way of low provisioningfor ICA signatories 4

5. Key Highlights of the Scheme Key Highlights of the Scheme -Contd. -Contd. Expert Committee of RBI to recommend financial parameters including sector specific benchmarks, as notified by RBI-to be considered in the RP Review of RP by Expert Committee and credit evaluation by rating agencies Permits Additional funding including interim funding after Invocation Escrow Manager to have enforcement powers for timely disbursement of credit facilities by LIs. 5

6. Ineligible Borrowers/ Exposures Ineligible Borrowers/ Exposures Micro, Small and Medium Enterprises (MSME) having aggregate exposure to LIs of <= INR25 crore Farm Credit Loans to Primary Agricultural Credit Societies, Farmers’ Service Societies and large Sized Adivasi Multipurpose Societies for on-lending to agriculture; Exposures to Financial Service Providers (as defined under section 3(17) of IBC 2016) Exposure to Central/State Govt., Local Govt. bodies and body corporates established by an Act of Parliament/State Legislature Exposure to HFCs – subject to certain conditions. 6

7. Resolution Process Resolution Process  Account classified as Standard and default not exceeding 30 days as on March 1, 2020 with any LI  Accounts should continue to be Standard as on Invocation Date Eligibility  Invocation happens when the LI(s) and the Borrower agree for proceeding with the Resolution Plan (RP) under the Scheme, however:  in case of Multiple LIs, if 75% by value of outstanding credit facilities and 60% by the number should agree for proceeding with the RP; Invocation  LIs to sign the ICA within 30 days of Invocation Date (Minimum 75% by value of Outstanding credit facilities and 60% by number to make it valid);  Lenders other than LIs permitted to sign the ICA- but shall be bound by its terms  ICA to lay down recourse available to disputing signatory(ies) & Information sharing mechanism. Inter Creditor Agreement (ICA)  The Resolution Plan for the Accounts having exposure >=INR 1500 crore (as on Invocation Date) to be vetted by the Expert Committee set up by RBI;  The Resolution Plan for the Accounts having exposure of >= INR 100 crore to have Independent Credit Evaluation by one Credit Rating Agency. Review and Implementation 7

8. General Guidelines General Guidelines  Escrow Mechanism for Accounts with multiple LIs with one of the LIs for routing all receipts, repayments and disbursements  Escrow Manager to have enforcement mechanism for timely servicing of Disbursement Obligations of the LIs Escrow Account Mechanism  RP can have any action as given in Paragraph 13 of June 7, 2019 Prudential Framework by RBI except “Compromise Settlement”  May include sanction of additional credit facilities;  LIs may allow Moratorium and/or extension of residual tenure (aggregate extension not to exceed two years)  To consider the Financial Parameters and the sector specific range thereof as notified by RBI. Resolution Plan- Features

9. General Guidelines General Guidelines –contd. –contd.  RP may provide conversion of a portion of debt into equity or other marketable non-convertible debt securities –however the amortization schedule and coupon carried by such debt securities to be similar to the terms of the debt held by LIs post implementation of RP.  Debt converted to Equity to be valued as per Paragraphs 19(c) & 19(d) of Prudential Framework;  Debt converted to other debt securities to be collectively valued at INR 1 Conversion of Exposures to other Securities  Additional Finance to meet interim liquidity to be classified as “Standard” till implementation of RP;  “Standard” classification to be retained or in case the account slips to NPA between Invocation and Implementation, the account to be upgraded to “Standard”, on implementation of RP which adheres to the provisions of Scheme. Asset Classification 9

10. Post Implementation Monitoring Post Implementation Monitoring  A period of 30 days commencing from the date of default, by the Borrower, during the Monitoring Period, with any of the Signatories of ICA Review Period  Starting from the date of implementation of RP  Later of (i) one year from the date of commencement of repayment/interest (whichever is later) of the credit facility with longest moratorium period and (ii) by when the repayment of at least 10% of the residual debt has happened. Monitoring Period  In case of default with any signatory to ICA, at the end of Review Period- account would be classified as NPA with all the LIs (including non-signatories) from earlier of (i) date of implementation of RP and (ii) date of classification of NPA before implementation of RP. Consequences of Default Fresh  Fresh restructuring on failure of the RP implementation under the Scheme can be taken up under Prudential Framework of June 7, 2019. Restructuring 10

11. About Resurgent India About Resurgent India

12. About Resurgent Group & Key Highlights About Resurgent Group & Key Highlights Closed Advisory and Fund Raising Transaction of more than 15000 Cr last year Resurgent India is growing Investment Bank, SEBI registered Category I Merchant Bank offering services like Advisory including Distressed Asset funding, Acquisitions, Private Equity, Debt Solutions, Structured Finance, Solutions, Valuations, TEV Studies and Enterprise Risk and Tax Advisory Services. 350+ successful transactions delivered across various sectors Special Restructuring Situation and Mergers & Capital Market Pan-Indian presence across Gurgaon, Mumbai, Kolkata, Bengaluru, Hyderabad, Jaipur, Chennai 150+ research papers published across industries as knowledge based firm Our team members act as product and industry specialists, with deep domain knowledge and research driven approach. We have a full-service domestic Indian platform which offers scale and depth of operations across business lines, global governance standards, and best-in-class product sophistication. Started Fintech Venture - SCOREME whose product is running in more than 25 Financial Institutions Team of 150+ experienced human force 12

13. Techno Economic Viability Studies Agency for Specialized Monitoring (ASM) Debt Syndication Special Situation Advisory incl. Restructuring and Insolvency Advisory (IBC) Services Our Group Services Our Group Services Transaction / Govt Advisory Business Valuation & Assets Valuation Training Services M&A and Private Equity Wealth Management 13

14. Our Approach to Restructuring Advisory Our Approach to Restructuring Advisory Understanding the business model Detailed analysis of cash flow mismatch Understanding and analysis of historical financial position and results Understanding the Industry Scenario Preparation of detailed Resolution Plan(RP) Representation before the LIs for the implementation of the RP Coordination & representation with external agencies like Credit Rating Agencies, Investment Committees, Forensic Auditors, Techno Economic Viability Study agencies, valuers, legal counsels etc. End to end support services till implementation of Resolution Plan. 14

15. Frequently Asked Questions Frequently Asked Questions

16. Frequently Asked Questions Frequently Asked Questions Query No 1 Who is Eligible under the Scheme? Any business entity having loan from eligible lenders which is not in default for more than 30 days as on March 1, 2020 and continues to be classified as Standard till Invocation Date. However, in case of MSME borrowers, the aggregate exposure should exceed INR 25 crore. Query No. 2 Whether the Scheme applicable to non-corporate borrowers? Yes, the Scheme is applicable to all eligible borrowers like Individual, Sole Proprietorship, Partnership, LLP, Society, Trust, Company etc. 16

17. Frequently Asked Questions- Frequently Asked Questions-contd. Query no 3 contd. Whether the Scheme permits disbursement of additional credit facilities? Yes, the LIs are permitted to sanction additional credit facilities to the borrowers as part of Resolution Plan. The LIs are also permitted to sanction interim credit facilities after Invocation Date. Query No. 4. By Which date the Scheme can be Invoked? The Scheme can be invoked any time upto December 31, 2020. Query No. 5. Whether the account would be downgraded on implementation of Resolution Plan? No, the account will not be downgraded upon implementation of the Resolution Plan. 17

18. Frequently Asked Questions- Frequently Asked Questions-contd. Query No. 6. contd. What would happen if the account slips to NPA during the period between Invocation and Implementation? Upon the implementation of Resolution Plan the account, if downgraded between the Invocation and Implementation, shall be upgraded to Standard. Query No.7. Does the Scheme permits change in repayment terms of existing debt? Yes, the Scheme permits change in Repayment Schedule. Query No. 8. Can new lenders takeover the loans under the Scheme? No, the Scheme permits implementation of Resolution Plan only with existing Lenders. 18

19. Frequently Asked Questions- Frequently Asked Questions-contd. Query No. 9. contd. Whether the Scheme allows moratorium? Yes, the Scheme allows the LIs to permit moratorium. However, any additional facilities on account of any irregularity, needs to be repaid within 2 years including moratorium. Query No. 10. What is period of extension for repayment is permitted under the Scheme? Total period of extension in the repayment period over the existing repayment period, including moratorium if any, can not exceed two years. eg. For an existing loan having last repayment date as Feb. 29, 2020, the revised repayment including moratorium if any cannot be beyond Feb 28, 2022. 19

20. Frequently Asked Questions- Frequently Asked Questions-contd. Query No. 11. contd. What is the significance of Monitoring Period? Any default during the monitoring period has to be rectified within 30 days; failure will result in classification of account as NPA. However, once the monitoring period is over, any delinquency in servicing the debt shall be treated as per other applicable guidelines. Query No. 12. What is the time available for implementation of Resolution Plan after Invocation? The Scheme permits 180 days for implementation after Invocation Date. 20

21. Frequently Asked Questions- Frequently Asked Questions-contd. Query No. 13. contd. How the viability of a Resolution Plan will be established? Based on the recommendations of the Expert Committee headed by Sh. K. V. Kamath, RBI will notify the financial parameters and sector specific desirable ranges of such parameters to be factored in the Resolution Plan. Further, the Resolution Plan with exposure of INR 100 crore or more will require Independent Credit Evaluation by a Credit Rating Agency. Moreover, where the exposure is INR 1500 crore or above, the Resolution Plans will require vetting by the Expert Committee. Query No. 14. Whether the Resolution Plan requires Credit Rating? For exposures of INR 100 crore or more, the Resolution Plan requires to have an Independent Credit Evaluation from a credit rating agency. 21

22. Frequently Asked Questions- Frequently Asked Questions-contd. Query No. 15. contd. Any sector excluded under the Scheme? The Scheme is sector agnostic and all the eligible borrowers can avail the restructuring under the Scheme. Query No. 16. Whether the Scheme Covers personal loans and loans availed by MSME? The Scheme covers the personal loans and other business loans. MSMEs with exposure upto INR 25 crore are not covered in the Scheme and are dealt with under separate guidelines. However, this document does not cover the Personal Loans and MSME loans upto INR 25 crore. 22

23. Disclaimer Disclaimer This document provides the readers a bird’s eye view of the guidelines issued by RBI dated August 6, 2020 on “ Resolution Framework for COVID-19 –related stress” (the Scheme) with regard to other than personal loans. This document does not purport to replace or interpret the provisions of the Scheme. The contents provided in the document treats the subject covered, in a condensed form and as a general guide. The contents should not be relied upon for taking any decision. The recipients of this document should make their own independent evaluation or interpretations or should consult their advisors and should not rely on the contents of this document. No representation or warranty, expressed or implied is made about the completeness and accuracy of the information contained in this document and the Resurgent India Limited, any of its associates, employees, officers, directors, advisors or agents shall have no liability for any statement, opinion or information or any matter arising out of/contained in/derived from or for any omissions from this document or for any liability for any loss arising from the use of any information contained in this document.

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