RBI notifies extension of MSMEs debt recast window
Parul February 14, 2020
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According to reports, the Reserve Bank of India (RBI) has notified extension of the deadline for a one-time restructuring scheme of small business loans by another nine months to 31 December. The central bank said that the aggregate exposure, including non-fund based facilities, of banks and NBFCs to the borrower should not exceed Rs 25 crore as on 1 January, 2020.
This recast, RBI stated, will be applicable if the borrower’s account was in default but was a standard asset as on 1 January and continues to be classified as standard till the recast.
However, loans that have already been restructured in accordance with the last year’s provisions will not be eligible for restructuring under the current circular.
While announcing the extension of the restructuring window RBI stated,” the micro, small and medium enterprises (MSMEs) sector plays an important role in the growth of the Indian economy, contributing over 28% of the gross domestic product (GDP), more than 40% of exports, while creating employment for about 110 million people.”