RBI reopens one-time loan restructuring for individuals and small businesses

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The Reserve Bank of India has reopened its one-time loan restructuring plan for individuals and small businesses that suffered lockdowns amid a resurgence of coronavirus infections during the second wave of the pandemic that hit India hard.

“The resurgence of the COVID-19 pandemic in India over the past few weeks and the associated containment measures adopted at the local and regional levels have created new uncertainties and impacted the nascent economic recovery that was taking shape. In this environment, the most vulnerable category of borrowers are individual borrowers. , small businesses and MSMSEs, ”RBI Governor Shaktikanta Das said in a speech.

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Under the Resolution Framework 2.0, individuals, small businesses and micro, small and medium enterprises (MSMEs) with aggregate exposure of up to Rs 25 crore and who have not benefited from restructuring under the Resolution Framework 1.0, in which the moratorium on loans was last announced. year, and which were classified as standard as of March 31, 2021 will be eligible for consideration under Resolution 2.0, the RBI governor said.

Restructuring under the proposed framework can be invoked until Sept. 30 and will need to be implemented within 90 days of invocation, Das said.

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For individual borrowers and small businesses that have benefited from the restructuring of their loans under Resolution Framework 1.0 where the resolution plan authorized a moratorium of less than two years, credit institutions are allowed to use this window to modify these plans to the point of increasing the moratorium period and / or extension of the remaining term up to a total of two years, added Mr. Das.

In another development, the RBI Governor said the Reserve Bank of India will provide a term liquidity facility of Rs 50,000 crore to facilitate access to funds for emergency medical services.

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Shaktikanta Das expressed his faith in India’s ability to emerge from the Covid-19 crisis and added that the RBI continues to monitor the situation closely. India has already crossed the 2 crore mark for the total number of cases of Covid infections, which is the second highest in the world – just behind the United States and ahead of Brazil. India is fighting a fierce increase in coronavirus cases and we must mobilize all our resources with renewed vigor, the governor stressed.

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