The Reserve Bank of India (“RBI”) by way of its earlier circular dated February 11, 2020 (“February Circular”) had allowed a one-time restructuring of existing loans to Micro, Small and Medium Enterprises (“MSME”) classified as ‘standard’ assets, without a downgrade in the asset classification.
In furtherance of the February Circular which provided relief for MSME accounts classified as ‘standard’ as on January 1, 2020, the RBI in order to alleviate the economic hardships caused on account of COVID-19, has by way of its circular dated August 6, 2020 (“August Circular”), decided to further allow restructuring of MSME loans classified as ‘standard’ as on March 1, 2020, subject to the following conditions:
Please find a copy of the August Circular here.
This update has been contributed by Aastha (Partner) and Swaraj Singh Narula (Associate).
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