After a nudge by the Union Budget, the Reserve Bank of India (RBI) has decided to extend the benefit of one-time restructuring without an asset classification downgrade to standard accounts of GST registered MSMEs that were in default on January 1, 2020.
The move will benefit the eligible MSME entities which could not be restructured under the provisions of the circular dated January 1, 2019, as also the MSME entities which have become stressed thereafter.
The restructuring of the borrower account was to be implemented by March 31, 2020. The restructuring under the scheme has to be implemented latest by December 31, 2020, RBI said in a statement on Thursday.
The scheme has provided relief to a large number of MSMEs. The process of formalisation of the MSME sector has a positive impact on financial stability and this process is still underway, the central bank said.
While emphasised that this is a one-time regulatory dispensation, the central bank said detailed guidelines would be issued shortly.