The restructuring has to be implemented by March 31, 2020, said RBI.The Reserve Bank of India on Tuesday released a set of guidelines on restructuring of loans to MSME (Micro, Small and Medium Enterprises) sector.
Announcing new norms, RBI permitted a one-time restructuring of existing loans to troubled MSMEs under certain conditions.
The RBI said, in a statement, that MSME loans worth up to Rs 25 crore in default but standard category as on January 1, 2019 will be allowed a one-time restructuring.
The RBI further said that this restructuring will be permitted "without an asset classification downgrade".The restructuring has to be implemented by March 31, 2020, according to central bank.The decision was taken at central bank's board meeting in November to support small and medium sized companies who have been struggling to repay their loans.The RBI also asked banks to make a provision for an additional 5 per cent of loans they restructure under new policy and directed lenders to implement scheme by end of March 2020.(With Reuters Inputs)