Guidelines for Restructuring of Advances in Micro, Small and Medium Enterprises (MSME) sector

RBI vide notification no. RBI/2019-20/160 dated February 11, 2020, it has been decided to extend the one-time restructuring of MSME advances.

Accordingly, a one-time restructuring of existing loans to MSMEs classified as ‘standard’ without a downgrade in the asset classification is permitted, subject to the following conditions:

  • The aggregate exposure, including non-fund based facilities, of banks and NBFCs to the borrower does not exceed ₹25 crores as on January 1, 2020.
  • The borrower’s account was in default but was a ‘standard asset’ as on January 1, 2020 and continues to be classified as a ‘standard asset’ till the date of implementation of the restructuring.
  • The restructuring of the borrower account is implemented on or before December 31, 2020.
  • The borrowing entity is GST-registered on the date of implementation of the restructuring. However, this condition will not apply to MSMEs that are exempt from GST-registration. This shall be determined on the basis of exemption limit obtaining as of January 1, 2020.

https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11808&Mode=0

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