New RBI norm allows one-time restructuring of loans defaulted by MSMEs

The aggregate exposure, including non-fund based facilities of banks and NBFCs, to a borrower should not exceed Rs 25 crore as on January 1, 2019 to be eligible for the scheme.

The Reserve Bank of India (RBI) on Tuesday issued norms for restructuring loans defaulted by micro, small and medium enterprises (MSME), aiding a sector hit by demonetisation and implementation of GST.

The RBI allowed a one-time restructuring of loans up to Rs 25 crore defaulted on payment but are classified "standard” as on January 1, 2019, without an asset classification downgrade, the central bank said in a statement.

The aggregate exposure, including non-fund based facilities of banks and NBFCs, to a borrower should not exceed Rs 25 crore as on January 1, 2019, and the restructuring has to be implemented by March