The Reserve Bank of India reopened a one-time debt restructuring scheme

Dear Members,

The Reserve Bank of India reopened a one-time debt restructuring scheme as the economy braces for the impact of a renewed surge in Covid-19 cases. Retail borrowers and small businesses will be permitted to recast their loans, without being downgraded to non performing category, under the scheme.

● The one-time restructuring scheme will be available for borrowers with aggregate outstanding dues of up to Rs 25 crore. 

● Only accounts which are classified as standard as of March 31, 2021 can be restructured. 

● Borrowers who have received relief under previous restructuring schemes, including that announced last year, would not be eligible. 

● As part of the scheme, lenders can extend the tenor of the loan by up to two years and also offer a moratorium for this period. 

● The RBI also said that any accounts restructured last year under the one-time restructuring scheme can be given a moratorium of up to two years, if not already provided. 

● Further, the banking regulator allowed lenders to review the working capital limits for small businesses that had restructured their dues in 2020 as a one one-time measure. 

The scheme would have to be invoked by Sept. 30 and implemented within 90 days of invocation, RBI Governor Shaktikanta Das said today