17 January, 2019
On January 1, 2019, the Reserve Bank of India (RBI) has decided to permit a one-time restructuring of existing loans to Micro, Small and Medium Enterprises (MSMEs) classified as 'standard' without a downgrade in the asset classification, subject to certain conditions such as
(a) the aggregate exposure, including nonfund based facilities, of banks and NBFCs to the borrower does not exceed ?250 million as on January 1, 2019,
(b) the borrower's account is in default but is a 'standard asset' as on January 1, 2019 and continues to be classified as a 'standard asset' till the date of implementation of the restructuring, etc.
Further, on January 2, 2019, the RBI constituted an Expert Committee on MSMEs. RBI considered it necessary that a comprehensive review is undertaken to identify causes and propose long term solutions, for the economic and financial sustainability of the MSME sector. The expert committee will submit its report by the end of June, 2019.
For further information, please contact:
Vineet Aneja, Partner, Clasis Law
vineet.aneja@clasislaw.com
