Mumbai (IANS) The Reserve Bank of India on Thursday extended a scheme whereby stressed MSME borrowers will become eligible for restructuring their debt, provided their accounts with lenders were classified as 'standard' as on March 1, 2020.
Accordingly, the existing loans to MSMEs classified as 'standard' will be re-structured without a downgrade in the asset classification.
"A restructuring framework for MSMEs that were in default but 'standard' as on January 1, 2020 is already in place," Das said while delivering the decision of the MPC on monetary policy.
"The scheme has provided relief to a large number of MSMEs. With COVID-19 continuing to disrupt normal functioning and cash flows, the stress in the MSME sector has got accentuated, warranting further support."
According to the RBI Governor, this restructuring will have to be implemented by March 31, 2021.
The Reserve Bank placed eligibility conditions such as the limit of aggregate exposure, including non-fund based facilities, of banks and NBFCs to the borrower should not exceed Rs 25 crore as on March 1, 2020.
Besides, the borrowing entity is GST-registered on the date of implementation of the restructuring. However, this condition will not apply to MSMEs that are exempt from GST-registration.