By Prakash Bhargava
New Delhi—The Reserve Bank of India (RBI) on Thursday announced major relief to medium enterprises by linking pricing of loans for the also on external benchmark effective April 1, 2020 and 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 as on January 1, 2020.
The restructuring under the scheme has to be implemented latest by December 31, 2020. This will benefit the eligible MSME entities which could not be restructured under the provisions of the circular dated January 1, 2019. Detailed guidelines, in this regard, will be issued shortly, RBI governor Shashikanta Das said.
The RBI also decided to permit extension of date of commencement of commercial operations (DCCO) of project loans for commercial real estate, delayed for reasons beyond the control of promoters, by another one year without downgrading the asset classification, in line with treatment accorded to other project loans for non-infrastructure sector. This would complement the initiatives taken by the Government of India in the real estate sector, said Mr Das and added the detailed instructions will also be issued shortly.
To encourage banks to undertake maturity transformation smoothly and seamlessly to augment credit flows to productive sectors, it has been decided that from the fortnight beginning on February 15, 2020, the Reserve Bank shall conduct term repos of one-year and three-year tenors of appropriate sizes for up to a total amount of Rs1,00,000 crore at the policy repo rate. Details about the LTRO facility are being issued separately.
To give a fillip to digital banking and enabling regional rural banks (RRBs) to provide cost effective and user-friendly solutions to their customers, it has been decided to allow RRBs, like other commercial banks, to act as merchant acquiring banks, using Aadhaar Pay – BHIM app and POS terminals.
The RBI proposed to place the draft revised regulations of Housing Finance Companies (HFCs)
on the Bank’s website for inviting public comments.
