The apex bank gives borrowers more 60 days to repay loans due to crunch caued by demonetisation
Mumbai, RBI Relaxation: In a major relief and showing empathy to the borrowers, the Reserve Bank of India, gave a huge relief to the cash crunch people due to demonetisation. The Reserve Bank of India on Monday provided additional 60 days for repayment option to housing, car, farm and any other loans worth up to Rs 1 crore.
This relief is applicable to loans payable between November 1 and December 31.
The RBI gave notification to banks, non-banking finance companies (NBFC), NBFC micro-finance institutions (MFI), housing finance companies and others, the RBI said it has received several representations for some more time for small borrowers to pay their loan dues after demonetisation of Rs 500 and Rs 1,000 bank notes.
The above relaxation is available to entities running working capital accounts with any bank with the sanctioned limit of Rs 1 crore or less.
As a relief to the small borrowers, the RBI has said that banks, NBFCs, housing finance companies, NBFC (MFI) and other entities regulated by it are given additional 60 days time before classifying a loan account sub-standard.
The apex bank told banks, NBFCs, housing finance companies and others that this is a short-term deferment of norms for classification of a loan account as sub-standard due to delay in payment of dues owing to currency crunch.
The central bank has categorically said the delay in payment of loan dues falling between November 1 and December 31 should not result in the restructuring of loan accounts.
Dues payable before November 1 and after December 31 this year will be covered by the extant instruction for the respective regulated entity with regard to recognition of NPAs.
As per the RBI's notification, the additional time is available for the following types of loans and the relevant organization regulated by it:
Neither borrowers' credit score is impacted negatively due to non-payment nor financial institutions have to make additional provisions for sub-standard account.