In view of the continued need to support viable MSME entities on account of the fallout of COVID-19, the Reserve Bank of India (RBI) on Thursday extended the one-time debt restructuring for small businesses by another three months to March 2021.
Besides, the central bank has also relaxed some existing provisions for availing of this scheme by micro, small and medium enterprises (MSMEs).
With COVID-19 continuing to disrupt normal functioning and cash flows, the stress in the MSME sector has got accentuated, warranting further support, RBI Governor Shaktikanta Das said while announcing the central bank’s bi-monthly monetary policy outcome.
As per the existing scheme, the borrower account had to be standard as on January 1, 2020.
Commenting on the scheme, PwC Partner Kuntal Sur said it was a good move by the RBI and would help MSMEs impacted by COVID-19 to get time and space to service debt when cash flows are under pressure due to uncertainty.
