RBI Extends One-time Restructuring Scheme for MSME Loans

After Finance Minister Nirmala Sitharaman, while presenting Union Budget 2020 on 1st February, said the government has asked the Reserve Bank of India (RBI) to extend the debt restructuring window by another year ending March 31, 2021, RBI in its Monetary Policy Review Meeting today said that it would be extending the scheme to 31st December 2020, Mint reported. The central bank stated that the Micro, Small and Medium Enterprises (MSMEs) sector plays an important role in the growth of the Indian economy, contributing over 28 per cent of the GDP, more than 40 per cent of exports, while creating employment for about 11 crore people.  "Considering the importance of MSMEs in the Indian economy and for creating an enabling environment for the sector in its efforts towards formalisation, a one-time restructuring of loans to MSMEs that were in default but ‘standard’ as on January 1, 2019, was permitted without an asset classification downgrade. The restructuring of the borrower account was to be implemented by March 31, 2020," said RBi in a statement. Read more