Module: General Practice
Q160: Consider the "Standstill Clause" during the review period of an MSME's Corrective Action Plan (CAP). What does this clause imply for the bank?
✅ Correct Answer: B
🎯 Quick Answer:
Prohibition on legal recovery measures.Function: Once a borrower applies for restructuring or a review is initiated (e.g., during the 30-day review period), the bank agrees not to drag the borrower to court or invoke SARFAESI immediately.
Causal Reasoning: This "ceasefire" creates a conducive environment for negotiation.
If the bank were to seize assets while discussing revival, the revival plan would be rendered meaningless.