EDITIONS
Stories

RBI's loan-repayment relief for MSMEs affected by GST

31st Oct 2018
Add to
Shares
0
Comments
Share This
Add to
Shares
0
Comments
Share

MSMEs can draw a sigh of relief. The Reserve Bank of India (RBI) has announced a temporary loan-repayment breather that was affected due to the implementation of GST move by the government.

According to media reports, RBI has noted that the formalisation of business through registration under GST had adversely impacted the cash flows of small businesses during the transition phase and they were facing difficulties in meeting their loan repayments to banks and NBFCs.

The notification for this was issued in February 2018 and only MSMEs registered under GST were provided the breather. Accordingly it was decided that the exposure of banks and NBFCs to a borrower classified as micro, small and medium enterprise under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, will continue to be classified as a standard asset in the books of banks and NBFCs subject to the following conditions.

Thus, banks and NBFCs were allowed to temporarily classify their exposures to GST registered MSMEs, having aggregate credit facilities from these lenders up to Rs 250 million, as per a 180-day past due criterion, subject to certain conditions.

Add to
Shares
0
Comments
Share This
Add to
Shares
0
Comments
Share
Report an issue
Authors

Related Tags