Debt Restructuring Mechanism for MSMEs -2019

As a measure of support to MSMEs in their transition to a formalised business environment, Reserve Bank of India vide its circular no. RBI/2018-19/700 DBR. No. BP. BC.78/21/21.04.048/2018-19 dated 07.07.2079 [Annexure-l] has permitted a one-time restructuring of existing loans to MSMEs classified as 'standard' without a downgrade in the asset classification, subject to the following conditions:


a. The aggregate exposure, including non-fund based facilities, of banks and NBFCs to the borrower does not exceed Rs.25 crore as on January 1, 2019.


b. The borrower's account is in default but is a 'standard asset' as on January 1, 2019.


c. The borrowing entity is GST-registered on the date of implementation of the restructuring. However, this condition will not apply to MSMEs that are exempt from GST-registration.


d. The restructuring of the borrower account is implemented on or before March 31, 2020. A restructuring would be treated as implemented if the following conditions are met:


i. All related documentation, including execution of necessary agreements between lenders and borrower / creation of security charge / perfection of securities are completed by all lenders; and


ii. The new capital structure and f or changes in the terms and conditions of the existing loans get duly reflected in the books of all the lenders and the borrower.


For applying under debt restructure scheme download applicable application from link given herein below, fill up the required information and submit it to concerned Branch along with details as per check list in the application.


1. Application form for loan up to Rs. 10 lakh.

2. Application form for loan above Rs. 10 lakh.

Feedback