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Cash crunch: RBI eases bad loan rules for small borrowers

Cash crunch: RBI eases bad loan rules for small borrowers

India Blooms News Service | | 21 Nov 2016, 08:41 pm
New Delhi, Nov 21 (IBNS): The Reserve Bank of India on Monday provided additional 60 days time to small borrowers to repay housing, car, farm and other loans worth up to Rs 1 crore.

"It has been represented to us that consequent upon withdrawal of the legal tender status of the existing 500 and 1,000 notes (SBN) small borrowers may need some more time to repay their loan dues. Taking these representations into consideration, it has been decided to provide an additional 60 days beyond what is applicable for the concerned regulated entity(RE) for recognition of a loan account," read an RBI notification.

It applies to dues payable between Nov 1 and Dec 31.

"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," read the notification.

Speaking further on the facility that will available in certain cases, the bank said: "Term loans, whether business or personal, secured or otherwise, the original sanctioned amount whereof is  1 crore or less, on the books of any bank or any NBFC, including NBFC (MFI). This shall include housing loans and agriculture loans."

The Centre on Nov 8 banned Rs. 1000 and Rs. 500 currency notes.

PM Narendra Modi has sought 50 days to fix the cash problem, promising long-term benefits from the demonetisation.

Image: Wikimedia commons