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RBI Loan Reorganization with Maximum Rs 50 Cr for MSME: Eligibility and Other Criteria

Reserve Bank of India (RBI) doubles loan restructuring limits for small and medium-sized enterprises (MSMEs) and small borrowers to Rs 5 billion to provide relief during the second wave of the COVID-19 pandemic announced. “Under the scheme, we raise the maximum total exposure threshold from Rs 2.5 billion to Rs 5 billion with the aim of enabling more borrowers to benefit under the Resolution Framework 2.0. It has been decided to expand its coverage: MSME, lending to non-MSME small businesses and individuals for business purposes, “said Shaktikanta Das, Governor of the Reserve Bank of India, on Friday.

On May 5, the central bank announced a second loan restructuring for individuals and SME and micro enterprise borrowers who did not have access to the facility in the previous round. Under the Resolution Framework 2.0, individuals and businesses can choose loan restructuring options up to Rs. 250 million. Currently, the threshold has been raised to 50,000 rupees.

Qualification

It has exposures totaling up to 50 billion rupees, does not utilize restructuring under the previous restructuring framework (including the resolution framework 1.0 dated August 6, 2020), and is “standard” on March 31. Borrowers classified as 2021 shall be eligible for consideration under the Resolution Framework 2.0 mentioned by the Central Bank.

The newly announced benefits are

1) Individuals who have used loans for business purposes and whose lending institution has an exposure totaling less than Rs 5 billion as of March 31.

2) Small and medium-sized enterprises (including retail and wholesale businesses) that are classified as MSME as of March 31, 2021 and whose lenders have exposures totaling less than 5 billion rupees as of March 31. Company.

Last day of loan restructuring application

Banks and lenders may invoke restructuring until September 30 under the proposed framework. The loan suspension must be implemented within 90 days of invocation.

“The expansion of Resolution Framework 2.0 from Rs 25 million to Rs 50 million will extend credit coverage to more individuals and businesses. Given that micro-enterprise is making a significant contribution to GDP. , The bailout will accelerate the recovery of micro-enterprise and further stimulate the financial stability of the economy, “said Shachindra Nath, chairman and managing director of U GRO Capital.

For those who have previously selected the one-time loan restructuring option

Banks and lenders can extend their loan restructuring options for up to two years if they choose Moratorium in previous rounds. According to the central bank, small business owners and individuals can use this option to pay membership fees.

“Raising the bank lending restructuring limit from Rs 25 million to Rs 50,000,000 is a welcome move to support micro-enterprise. The announced measures will increase consumer demand and gradually increase economic activity. We look forward to helping you, “said Razzy R., Chief Evaluator of Brickwork Ratings.

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RBI Loan Reorganization with Maximum Rs 50 Cr for MSME: Eligibility and Other Criteria

Source link RBI Loan Reorganization with Maximum Rs 50 Cr for MSME: Eligibility and Other Criteria

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