RBI allows loan recast for individuals, MSMEs

New Delhi: Giving much-needed relief to the Covid-hit, Reserve Bank of India Governor Shaktikanta Das announced a slew of relief measures to help stakeholders battle the impact of the second wave in the country. The announcements included loan restructuring facilities for individuals, small businesses and micro, small & medium enterprises (MSMEs) and providing additional liquidity to boost the healthcare infrastructure. Das said the borrowers that are individuals and micro, small and medium enterprises having aggregate exposure of up to Rs 25 crore would be considered for the new scheme. This would be for those who have not availed restructuring under any of the earlier frameworks, including the Resolution Framework 1.0 of RBI dated August 6, 2020, and who are classified as standard as on March 31, 2021, shall be eligible for the Resolution Framework 2.0, he said.

Under the proposed framework, the restructuring may be invoked up to September 30, and shall have to be implemented within 90 days after the invocation, he added.

The RBI has also introduced Rs 10,000 crore special long-term repo operation for small finance banks. Under this, loans up to Rs 10 lakh to MSMEs will be considered as priority sector lending, Das said.

Das also announced relaxation in overdraft facility for State governments to enable them to better manage their fiscal situation in terms of their cash flows and market borrowing. Now the maximum number of days of overdraft has been increased from 36 to 50 days. The RBI also announced rationalisation of certain components of the extent know-your-customer (KYC) norms for enhancing customer convenience. These include extending the scope to video KYC known as the video-based customer identification process, he said.