RBI extends deadline for a one-time restructuring scheme of small business

The RBI has issued a notice regarding the extension of the deadline for a one-time restructuring scheme of small business loans up to 31 December.

The central bank has stated that the aggregate exposure, inclusive of non-fund based facilities, of banks and NBFCs to the borrower should not exceed Rs25 crore as on 1 January, 2020. RBI further said that this recast will be applicable if the borrower’s account was in default but was a standard asset as on January 1 and continues to be classified as standard till the recast.

“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,” RBI had said while announcing the extension of the restructuring window. “It is reemphasized that this is a one-time regulatory dispensation,” RBI had said.