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April 30, 2020

5 Relief measures announce by RBI in view of COVID-19 beneficial to MSME

by facelesscompliance in Compliance Law

5 Relief measures announce by RBI in view of COVID-19 beneficial to MSME

1) Reduction in CRR

The cash Reserve Ratio [CRR] of all banks to be reduced by hundred basis points 3% of net demand and time liabilities w.e.f. March 28, 2020, which  would be inject Rs. 1,37,000 crore across the banking system, Besides it has also been decided to reduce minimum daily CRR balance from 90% to 80% effective from march 28, 2020. Which will be available up to June 26, 2020

2) Rescheduling of Payments    

A moratorium of 3 month on payment of all instalments of term loan falling due between March 1, May 31, 2020.

The accumulated accrued interest shall be recorded immediately after the completion of this period.

3) Ease of working capital finance

In respect of working capital facilitate sanctioned in the form of CC/OD to borrowers facing stress, the lending institutions may recalculate ‘drawing power’ by reducing margin and/or reassessing the working capital cycle. Such relief available up to 31st May 2020.

4) Classification as Special Mention Account (SMA) and Non-Performing Asset (NPA)

As the moratorium /deferment /recalculation of the ‘drawing power’ is being provided to the borrowers it will not be treated as concession or change in terms and condition of long agreements under para 2 of Annex  to RBI (Prudent Framework for resolution of stressed assets) Directions, 2019

The rescheduling of Payments,    including interest, will not qualify as default for supervisory reporting and reporting Credit Information Companies (CICs) by the leading institutions.

5) Extension of realization period of export proceeds

The time period of realization and repatriation of export proceeds of exports made up or on July 31st 2020, has been extended to 15 months from the date of export while is presently 9 months from date of export s.