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21
November 2016
With the nation facing a cash crunch and
small borrowers not able to repay their loan dues on time, the Reserve Bank of
India (RBI) on Monday came to their rescue by easing the norms for classifying
a loan into bad. The Total Investment
& Insurance Solutions
In a notification to banks, non-banking
finance companies (NBFC), NBFC micro-finance institutions (MFI), housing
finance companies and others, the RBI said it has received several
representations for some more time for small borrowers to pay their loan dues
after demonetisation of Rs500 and Rs1,000 bank notes. The Total Investment & Insurance Solutions
As a relief to the small borrowers, the
RBI has said that banks, NBFCs, housing finance companies, NBFC (MFI) and other
entities regulated by it are given additional 60 days time before classifying a
loan account sub-standard. The Total
Investment & Insurance Solutions
According to RBI, the new norms are
applicable only for dues payable between November 1 and December 31 this year. The Total Investment & Insurance
Solutions
The RBI told banks, NBFCs, housing
finance companies and others that this is a short-term deferment of norms for
classification of a loan account as sub-standard due to delay in payment of
dues owing to currency crunch. The
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The central bank has categorically said
the delay in payment of loan dues falling between November 1 and December 31
should not result in restructuring of loan accounts.
Dues payable before November 1 and after
December 31 this year will be covered by the extant instruction for the
respective regulated entity with regard to recognition of NPAs.
As per the RBI's notification, the
additional time is available for the following types of loans and the relevant
organisation regulated by it: The Total
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Running working capital accounts
(OD/CC)/crop loans, with any bank, the sanctioned limit whereof is Rs 1 crore
or less. The Total Investment &
Insurance Solutions
Term loans, whether business or personal,
secured or otherwise, the original sanctioned amount whereof is Rs 1 crore or
less, on the books of any bank or any NBFC, including NBFI (MFI). This shall
include housing loans and agriculture loans. The Total Investment & Insurance Solutions
Loans sanctioned by banks to NBFC (MFI),
NBFCs, housing finance companies, State Cooperative Banks to District
Cooperative Central Banks and others.
The above guidelines will also be
applicable to loans extended by DCCBs.The
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