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02
January 2018
 |
MSME
(The Total Investment & Insurance Solutions)
In a
measure of relief for the troubled micro and small industries segment, the RBI
on Tuesday permitted a one-time restructuring of existing loans that are in
default but "standard" as on January 1, 2019, without an asset
classification downgrade.
Support
for micro, small and medium enterprises (MSMEs) was one among the contentious
issues between the Reserve Bank of India (RBI) and the government leading to
the abrupt resignation of previous RBI Governor Urjit Patel last month and the
immediate appontment of his successor Shaktikanta Das, who had earlier retired
as the Union Economic Affairs Secretary.
The RBI
in a statement said the issue of restructuring of MSME accounts was discussed
in the meeting of the RBI board on November 19 when Patel was the
Governor.
"The
MSME issue has been examined in RBI and a view has been taken to facilitate
meaningful restructuring of MSME accounts that have become stressed," it
said.
"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. The restructuring has to be implemented by March 31,
2020."
To be
eligible for the scheme, the aggregate exposure, including non-fund based
facilities of banks and non-banking finance companies (NBFCs), to an MSME
borrower should not exceed Rs 250 million (Rs 25 crore) as on January 1, 2019,
it added.
The
apex bank has directed banks and NBFCs to make a provision of 5 per cent, in
addition to the provisions already held, for accounts restructured under this
scheme.
"Each
bank/NBFC should formulate a policy for this scheme with Board approval which
shall, inter alia, include framework for viability assessment of the stressed
accounts and regular monitoring of the restructured accounts," the RBI
said.The Total Investment & Insurance
Solutions
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