Demonetisation: Borrowers get additional 60 days to repay loans

Mumbai, Nov 21: In view of the cash crunch being faced by borrowers, the RBI on Monday provided an additional 60 days for the repayment of housing, car, farm and other loans worth up to Rs. 1 crore.

This is applicable for loans payable between November 1 and December 31, the RBI said in a notification.

“… 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,” it said.
The relaxation is available to entities running working capital accounts with any bank with the sanctioned limit of Rs. 1 crore or less.

Term loans, both business or personal, secured or otherwise, on the books of any bank or any NBFC, including NBFC-MFI, would get the benefit of this relaxation.

The central bank further said that all regulated financial institutions should note that this is a short-term 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.