Note on Restructuring of Advances in MSME Sector

Note on Restructuring of Advances in MSME Sector Micro, Small and Medium Enterprises (MSME) sector – Restructuring of Advances Reserve Bank

CS Lalit Rajput

Apr 20, 2020

Last update on Apr 20, 2020

Note on Restructuring of Advances in MSME Sector Micro, Small and Medium Enterprises (MSME) sector – Restructuring of Advances Reserve Bank of India vide circular no. RBI/2019-20/160, DOR.No.BP.BC.34/21.04.048/2019-20 dated 11.02.2020 has decided to extend the one-time restructuring of MSME advances permitted. According to above mentioned circular, a one-time restructuring of existing loans to MSMEs classified as 'standard' without a downgrade in the asset classification is permitted, subject to the following conditions: I. 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, 2020. II. The borrower’s account was in default but was a ‘standard asset’ as on January 1, 2020 and continues to be classified as a ‘standard asset’ till the date of implementation of the restructuring. III. The restructuring of the borrower account is implemented on or before December 31, 2020. IV. 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. This shall be determined on the basis of exemption limit obtaining as on January 1, 2020. It is clarified that accounts which have already been restructured in terms of the circular dated January 1, 2019 shall be ineligible for restructuring under this circular. Source Link Disclaimer: IN NO EVENT THE AUTHOR SHALL BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM OR ARISING OUT OF OR IN CONNECTION WITH THE USE OF THIS INFORMATION. You May Also Refer:

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About Author

CS Lalit Rajput

Company Secretary

Lalit Rajput is a qualified Company Secretary and graduate with 5+ years’ experience in handling Secretarial and Compliance management. Working as Proprietor at Lalit Rajput &Associates, Company Secretaries and Compliance Head at EDUXGURU. Key areas include handling Compliances related to Secretarial, Start-ups, SEBI, FEMA, Labour Laws, GST, NCLT, IPR, MCA/ROC, RTA etc. He has started his career in Adventz Group with one of leading EPC Company, Kalindee Rail Nirman - A Div. Of Texmaco Rail & Engineering Limited (erstwhile known as Kalindee Rail Nirman (Engrs.) Ltd.) and after that worked with Outcome Solutions & Services LLP, a Risk Advisory firm and S. Srinivasan & Co.,Leading Company Secretaries firm in Mumbai and Chennai. He is also an active blogger/Author at many platform and has written various articles on: Taxguru, Compliance Calendar LLP, Studycafe, Caclubindia, Casansaar, theTaxTalk, Lawyer’s Connect, IPleaders, Governance Professionals, Lawyers club India, Dealout Professionals and many more. He has also blogger at ENLIGHTEN GOVERNANCE and contributed articles in ICSI E-Corporate Manager published by ICSI Ahmadabad Chapter.