K V Kamath Committee Report

What is KV Kamath’s Report?

The KV Kamath committee had the objective of conducting the research on various scenarios, which consisted of studies focusing on financial sectors damaged during the economic slump caused by the Covid-19 epidemic; this committee, under the charge of KV Kamath, has identified 26 industries that would require reorganisation. Electricity, architecture, steel and iron, highways, estate development, industrial dealing, textile industry, consumer products, transportation, shipping, lodgings, including tourism, as well as mining are among the categories that will require reorganisation, according to the five-member committee’s study. The panel chose five financial data, which consisted of topics such as debt, liquidity, leverage, and so on.

Kundapur Vaman Kamath was the former Chairman of the big tech company known as Infosys Limited; which is India’s second-largest information and technology services company. KV Kamath was also the Non-Executive Chairman of ICICI Bank, which is one of India’s leading private banks. KV Kamath has also acted as the chairman of the New Development bank of BRICS. 

Brief on the KV Kamath Report:

The Reserve Bank of India had appointed a new representative, KV Kamath, who has acted as the CEO of ICICI Bank before being elected by RBI to carry out research work with the help of a five-member expert group which he guided by being the chairman of the group. The committee would make recommendations for dealing with financial issues with the increasing COVID-19 spread, which seems to be damaging the economy. The committee would then submit its proposals to the central bank, which will further look into the matters as well as advise the public about the issues. The expert committee must, therefore, further perform the approval as well as proper execution of resolution plans which were to be done with the help of the research work done under this committee. Diwakar Gupta, TN Manoharan, Ashvin Parekh, and Sunil Mehta are the elected representatives that will work alongside kv Kamath in this committee. All of these representatives are from respectable positions, such as Sunil Mehta, who was CEO of the Indian Banks Association and so on.  Additional representatives can be appointed when necessary, according to RBI guidelines. In addition, two representatives are said to participate in the committee later in the year, which makes the committee of only three representatives.

As previously mentioned, this committee would examine debt restructurings worth approximately Rs 1500 crore. The group also would suggest a set of financial metrics which should be implemented along with each resolution plan, including liquidity, debt service capability, as well as sector-focused benchmark values. The suggestions will be forwarded to the RBI and then further put out as general information to the public. It was announced that individuals or borrowers that have their names categorised under the standard section, but these individuals also need to have no defaults on loans or debts spanning more than 30 days from any financial institution as of March 1, 2020.

There were also plans for improving the MSME sector by building on previous attempts to enhance the MSME sector, including areas that had higher aggregates valuing more than 100 crore Indian rupees. The panel determined a new form of limits and guidelines for the operation of different sectors, including debt service sectors, current assets as well as liabilities, including total foreign payments. Financing of the major sectors will lead to a boost as well as effective growth of working capital throughout the economy of India, resulting in overall growth as well as recovery of industrial sectors. So rather than imposing a rigid framework upon financial institutions, the committee should have permitted some alternatives that will give people more freedom to invest.

Conclusion

The article explains the KV Kamath committee report briefly; it further talks about how the committee has carried out intensive research as well as well planned scenarios for bettering the Indian economy during the covid 19 pandemic. The article also mentions a few topics related to the Kv Kamath committee report.