Demonetisation: RBI gives borrowers additional 60 days to repay loans up to Rs 1 crore

The apex bank further said that all regulated financial institutions should note that this is a short-term deferment of classification as substandard due to delay in payment of dues arising during the period specified above and does not result in restructuring of the loans.

By: PTI | Mumbai | Updated: November 21, 2016 8:52 pm
RBI, Reserve Bank of India, IT dues, income tax dues, income tax, income tax india, income tax due, income tax due date, rbi income tax, business news, indian express, india news Term loans, whether business or personal, secured or otherwise, the original sanctioned amount of Rs 1 crore or less, on the books of any bank or any NBFC, including NBFC (MFI) would also get benefit of this relaxation.

In view of cash crunch being faced by borrowers, the RBI on Monday provided additional 60 days for repayment of housing, car, farm and other loans worth up to Rs 1 crore. This is applicable to loans payable between November 1 and December 31, the RBI said in a notification.

“… it has been decided to provide an additional 60 days beyond what is applicable for the concerned regulated entity for recognition of a loan account as substandard,” it said. The above relaxation is available to entities running working capital accounts with any bank with the sanctioned limit of Rs 1 crore or less.

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Term loans, whether business or personal, secured or otherwise, the original sanctioned amount of Rs 1 crore or less, on the books of any bank or any NBFC, including NBFC (MFI) would also get benefit of this relaxation. This will also include housing loans and agriculture loans, it said.

The apex bank further said that all regulated financial institutions should note that this is a short-term deferment of classification as substandard due to delay in payment of dues arising during the period specified above and does not result in restructuring of the loans.

“Dues payable before November 1 and after December 31, 2016, will be covered by the extant instruction for the respective regulated entity with regard to recognition of NPAs,” it said.

The demonetisation of higher value currency notes has affected normal banking activities including clearing of cheques. Besides, borrowers are unable to get payments from their creditors due to various restrictions including cash withdrawal limit of Rs 24,000 per week, limiting their options to repay their dues.

DHFL Chief Executive Officer Harshil Mehta said, “It is a welcome move by the RBI as many customers have expressed their inability to repay dues in time because of ongoing demonetisation drive.”

For many of them, EMIs are due in the first half of the month, so the relaxation will help keep account standard even when the payment is not received, he said.

Neither borrowers’ credit score is impacted negatively due to non-payment nor financial institutions have to make additional provisions for sub-standard account, he added.

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  1. D
    Dainik
    Nov 22, 2016 at 2:46 am
    Change Modi after changing Notes.
    Reply
    1. M
      MyTake
      Nov 21, 2016 at 9:41 pm
      Modi's answer to Vote Bank is Note Bank!
      Reply
      1. M
        MyTake
        Nov 21, 2016 at 11:13 pm
        It is amusing to see at last some of the crocodiles coming out of the woodwork to shed the tears! lt;br/gt;lt;br/gt;At least practicing is good which might lead to some real life behavior change!
        Reply
        1. A
          alam
          Nov 21, 2016 at 7:33 pm
          Small farmers are worst sufferers and one cannot blame entirely to govt since they are illiterate, mostly no bank account , and are unaware of the meaning demonetization and they account for 45 % out of 78 % total farmers that our own countries potion has.lt;br/gt;There aspects has to be considered and very hardly any news is seen on national level about these 45 % farmers that accounts for almost 55 crores of Indian potion.
          Reply
          1. A
            Amit
            Nov 21, 2016 at 10:31 pm
            Modi has no idea what he did and what will happen next with deterioting situation. Recovery from the harm caused by Noteban Politics could take 20 years minimum if sensible leader takes power in Delhi soon. Big Fish Modi backed by even biiger Fishes Adani, Ambani, Birla, Pawar, Mallya, Amit Shah, Lalit Modi, Shivraj Singh Chauhan, Vasundhar Raje are now eating up the wealth of 125 Crore Small Fishes.
            Reply
            1. A
              Anil Yeldi
              Nov 22, 2016 at 4:00 am
              @ Ashok S.RBI has taken good step Considering NBFC-MFI who are dealing their collection in cash only.NBFC-MFI having clients are poor people and that too in villages.People not having time to go for exchange because they dont want to loose their daily wages hence NBFV-MFI clients can pay their EMI's in old denomination and onward NBFC-MFI can pay their terms loans to Banks.
              Reply
              1. A
                ashok s
                Nov 22, 2016 at 12:12 am
                All joking. RBI , the banks, the nbfcs don't deal much in cash , when you borrow you give advance cheques or rtgs, or neft . a borrower hardly pays in cash
                Reply
                1. R
                  Raj
                  Nov 21, 2016 at 3:10 pm
                  I think this demonetization was a smokescreen, actual goal of the process is a mive cleanup of India's bad debt problem, where a huge write off may occur.
                  Reply
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