RBI extends loan restructuring facility of MSME loans
Published On: Thursday, August 6, 2020 | By: Team KnowMyStock
The Reserve Bank of India (RBI), in its second bi-monthly monetary meet held on August 6 provided a fresh lifeline to millions of stressed small businesses by extending the provision of restructuring of loans. Besides, it announced a relaxation on the loan-to-value (LTV) ratio for gold loans. The repo rate has been unchanged at 4 per cent and the reverse repo rate is at 3.35 per cent, while the MSF rate and Bank rates were also left unchanged at 4.25 per cent. “The scheme has provided relief to a large number of MSMEs. With Covid-19 continuing to disrupt normal functioning and cash flows, the stress in the MSME sector has got accentuated, warranting further "It has been decided that stressed MSME borrowers will be made eligible for restructuring their debt under the existing framework, provided their accounts with the concerned lender were classified as standard as on March 1, 2020. This restructuring will have to be implemented by March 31, 2021," RBI governor Shaktikanta Das said.
The governor also raised the Loan-to-Value ratio against gold to 90 per cent from current 75 per cent, to mitigate COVID-19 impact on households.
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