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RBI allows restructuring of debt up to Rs 25 crore; MSMEs to benefit

Prime News, National, Business, Mumbai, January 2:- The Reserve Bank of India (RBI) has allowed a one-time restructuring of existing debt of up to Rs 25 crore for the companies which have defaulted on payment but the loans given to them have continued to be classified as standard assets.

The decision of RBI will help the Micro, Small and Medium Enterprises (MSMEs) which are facing cash crunch in the wake of demonetisation and Goods and Services Tax (GST) implementation.

The central bank in a statement said that to facilitate a meaningful restructuring of MSME accounts that have become stressed, the RBI has decided to permit a one-time restructuring of existing loans to MSMEs that are in default but ‘standard’ as on January 1, 2019, without an asset classification downgrade.

To be eligible for the scheme, the aggregate exposure, including non-fund based facilities of banks and NBFCs, to a borrower should not exceed Rs 25 crore as on January 1, 2019, and the restructuring has to be implemented by March 31, 2020.

The RBI’s board in its crucial meeting held on November 19, 2018, had advised the central bank to examine a scheme for restructuring of stressed standard assets of MSME borrowers with aggregate credit facilities of up to Rs 25 crore. (Inputs: Agencies, NGB) 

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