INSUBCONTINENT EXCLUSIVE:
The RBI said restructuring under the scheme has to be implemented latest by December 31Mumbai: The Reserve Bank of India (RBI) tweaked the
mandatorily park with the RBI.Currently, the CRR stands at 4 per cent, which means banks have to park 4 per cent of their total deposit with
the RBI.This exemption window is available till July 2020, according to the RBI, which left the repo rate unchanged at 5.15 per cent at the
improve monetary transmission, the RBI is actively engaged in revitalising the flow of bank credit to productive sectors to support growth,
according to the sixth bi-monthly policy statement of current fiscal year."It has now been decided that scheduled commercial banks will be
allowed to deduct the equivalent of incremental credit disbursed by them as retail loans for automobiles, residential housing and loans to
MSMEs, over and above the outstanding level of credit to these segments as at the end of the fortnight ended January 31, 2020 from their net
demand and time liabilities (NDTL) for maintenance of CRR," it said.This exemption will be available for incremental credit extended up to
the fortnight ending July 31, 2020, the central bank said.To give a boost to the real estate sector, the RBI said, it has been decided to
permit extension of date of commencement of commercial operations (DCCO) of project loans for commercial real estate, delayed for reasons
beyond the control of promoters, by another one year without downgrading the asset classification, in line with treatment accorded to other
project loans for non-infrastructure sector."This would complement the initiatives taken by the Government of India in the real estate
The detailed instructions will be issued shortly," it said.Observing that the MSME sector plays an important role in the growth of the
Indian economy, RBI said the restructuring of the borrower account has been extended by further one year to March 31, 2021.Micro, small and
medium enterprises contribute over 28 per cent of the GDP, more than 40 per cent of exports and employs about 11 crore people.Considering
the importance of MSMEs in the economy and for creating an enabling environment for the sector, a one-time restructuring of loans to MSMEs
that were in default but 'standard' as on January 1, 2019 was permitted without an asset classification downgrade.The restructuring of the
borrower account was to be implemented by March 31, 2020, it said, adding that the scheme has provided relief to a large number of MSMEs."As
the process of formalisation of the MSME sector has a positive impact on financial stability and this process is still underway, it has been
decided to extend the benefit of one-time restructuring without an asset classification downgrade to standard accounts of GST registered
MSMEs that were in default as on January 1, 2020," it said.Restructuring under the scheme has to be implemented latest by December 31, 2020,
it said."This will benefit the eligible MSME entities which could not be restructured under the provisions of the circular dated January 1,
2019 as also the MSME entities which have become stressed thereafter
It is re-emphasised that this is a one-time regulatory dispensation
Detailed guidelines, in this regard, will be issued shortly," the RBI said.After the transfer of regulation of housing finance companies
(HFCs) from the National Housing Bank (NHB) to the RBI with effect from August 9, 2019, it was decided that central bank will carry out a
review of the extant regulatory framework applicable to these companies and issue revised regulations in due course.Also, until then,
proposed to place the draft revised regulations on the Bank's website by the end of this month, for public comments," it said.
