“The MSME issue has been examined in RBI and a view has been taken to facilitate meaningful restructuring of MSME accounts that have become stressed,” it said.
 
“RBI has decided to permit a one-time restructuring of existing loans to MSMEs that are in default but ‘standard’ as on January 1, 2019, without an asset classification downgrade. The restructuring has to be implemented by March 31, 2020.”
 
To be eligible for the scheme, the aggregate exposure, including non-fund based facilities of banks and non-banking finance companies (NBFCs), to an MSME borrower should not exceed Rs 250 million (Rs 25 crore) as on January 1, 2019, it added.
 
The apex bank has directed banks and NBFCs to make a provision of 5 per cent, in addition to the provisions already held, for accounts restructured under this scheme.
 
“Each bank/NBFC should formulate a policy for this scheme with Board approval which shall, inter alia, include framework for viability assessment of the stressed accounts and regular monitoring of the restructured accounts,” the RBI said.