The Reserve Bank of India (RBI) 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. This move came after the demonetization of high denomination currencies.
RBI said that it had received pleas saying small borrowers may need some more time to repay the loan dues due to the withdrawal of the legal tender status of the existing Rs 500 and Rs 1000 notes.
RBI said that loans up to Rs 1 crore from banks and finance companies would be eligible for this relaxation.
The new dispensation will be applicable to dues payable before November 1 and after December 31, 2016. 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.
RBI has granted similar relaxation for bank loans to non-banking financial companies (NBFCs) and housing finance companies (HFCs), as well as primary agriculture cooperatives (PACs). The loans by state co-operative banks to district central cooperative banks can also avail this offer.