The RBI on Monday announced a 60-day breather for repayment of home, car, commercial and farm loans of up to Rs 1 crore to provide relief to customers as banking services have been disrupted. This is applicable to loans payable between November 1 and December 31.
The RBI said in a notification that it has been decided to provide an additional 60 days beyond what is applicable for the concerned regulated entity for recognition of a loan account as substandard. The relaxation is available to entities running working capital accounts with any bank with a sanctioned limit of Rs 1 crore or less. Term loans, whether business or personal, secured or otherwise, the original sanctioned amount of Rs 1 crore or less, on the books of any bank or any NBFC, including NBFC (MFI) would also get the benefit of this relaxation. This will also include housing loans and agriculture loans, it said.
The RBI also stated that all regulated financial institutions should note that this is a shortterm deferment of classification as substandard due to delay in payment of dues arising during the period specified above and does not result in restructuring of the loans. Dues payable between November 1 and December 31, 2016, will be covered by the extant instruction for the respective regulated entity with regard to recognition of NPAs.
The demonetisation of higher value currency notes has affected normal banking activities including clearing of cheques. Besides, borrowers are unable to get payments from their creditors due to various restrictions including cash withdrawal limit of Rs 24,000 per week, limiting their options to repay their dues. The RBI said it has received representations saying due to withdrawal of Rs 500 and 1,000 notes, small borrowers may need some more time to repay their loan dues.
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