RBI has decided to extend the deadline for one-time restructuring scheme of MSME loans by another nine months to December 31.<\/p>\n\n\n\n
This decision came after the FM said in her budget speech that the government had asked RBI to extend the restructuring window.<\/p>\n\n\n\n
The Reserve Bank of India (RBI)<\/strong>[<\/a>1]<\/a><\/sup> in its Monetary Policy Review Meeting decided to extend the deadline of one-time restructuring scheme of MSME loans by another nine months to December 31, 2020. Earlier the restructuring window was to end on March 31, 2020. This decision of extending the deadline came after the Finance Minister of India in her second Union Budget speech announced that the government had asked the Reserve Bank of India (RBI) to extend the restructuring window till March 31, 2021.<\/p>\n\n\n\n Focusing on MSME sector RBI stated that these enterprises have significant importance in the growth of the Indian economy. MSMEs<\/strong><\/a> contribute around 24.63% of the GDP from service activities and at the same time creates employment for about 11 crore people.<\/p>\n\n\n\n Taking into consideration the importance of MSMEs in the Indian economy and to create an enabling environment for the sector, RBI permitted a one-time restructuring of loans to MSMEs that were in default but ‘standard’ as on January 1, 2019, without an asset classification downgrade.<\/p>\n\n\n\n Read our article<\/b>:MSME Form 1: Know The Procedure to File, Due Dates and Penalties\n<\/a><\/mark><\/p>\n\n\n\n RBI further added that the scheme has provided relief to a\nlarge number of MSMEs. Since the process of formalization of the MSME sector\nhas a positive impact on the financial stability and the process is still\nunderway, it has been decided to extend the benefit of one-time restructuring scheme\nof MSME loans up to December 31, 2020.<\/p>\n\n\n\n As per RBI\u2019s notification, the aggregate exposure, including\nnon-fund based facilities, of banks and NBFCs to the borrower should not exceed\nRs 25 crore as on January 1, 2020. This restructuring, RBI said, will be\napplicable if the borrower\u2019s account was in default but was a \u2018standard asset\u2019 as\non January 1 and continues to be classified as \u2018standard asset\u2019 till the date\nof implementation of the restructuring. However, loans that have already been\nrestructured as per last year\u2019s provision will not be eligible for\nrestructuring under the current circular.<\/p>\n\n\n\n This one-time restructuring scheme of MSME Loans will benefit the eligible MSME entities which could not be recast under the provisions of the circular dated January 1, 2019. RBI reemphasized that this is a one-time regulatory dispensation and the borrowing entity should be GST-registered on the date of implementation of the recast. However, this condition will not apply to MSMEs that are exempted from GST registration<\/strong><\/a>.<\/p>\n\n\n\n Read our article<\/b>:MSME Registration \u2013 Know the Entire Procedure<\/a><\/mark><\/p>\n\n\nMSME-Sector RBI has decided to extend the deadline for one-time restructuring scheme of MSME loans by another nine months to December 31. This decision came after the FM said in her budget speech that the government had asked RBI to extend the restructuring window. The Reserve Bank of India (RBI)[1] in its Monetary Policy Review Meeting […]<\/p>\n","protected":false},"author":15,"featured_media":3403,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[176],"tags":[312],"acf":{"service_id":"71"},"authorName":"Shubham Chauhan","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/02\/shubham-chauhan.jpg","authorDescription":"A passionate legal content writer, a nature enthusiast, an avid reader, and a part-time thinker. By means of conducting in-depth research on industry related topics, Shubham often builds flawless and intelligible legal content for populace from all walks of life.","postViews":5394,"readingTime":2,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/3392"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=3392"}],"version-history":[{"count":14,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/3392\/revisions"}],"predecessor-version":[{"id":20966,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/3392\/revisions\/20966"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/3403"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=3392"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=3392"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=3392"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}One -Time Restructuring Scheme for MSME Loans: A Prudent Step<\/h2>\n\n\n\n
Take Away<\/h2>\n\n\n\n