RBI Extends Loan Restructuring 2.0 for Borrowers – Know Who's Eligible

The new restructuring options will open for individuals and small businesses who had availed the restructuring earlier and even for those who had not availed it earlier.

The second wave of Covid-19 has not only battered the economy but also made it difficult for people to survive owing to the financial crunch. In a special address Reserve Bank of India Governor Shaktikanta Das on Wednesday offered restructuring options for the borrowers struggling to repay loans on time.

The new restructuring 2.0 options have been announced amid the massive surge reported in infections across the country.

The new restructuring options will open for individuals and small businesses who had availed the restructuring earlier and even for those who had not availed it earlier. The apex bank also directed banks to give priority loans to vaccine makers, hospitals, and Covid-19-related health infrastructure.

Who will be eligible for the new restructuring 2.0?

Individuals, small business and micro, small and medium enterprises (MSMEs) with an exposure of up to Rs25 crore, who did not avail restructuring earlier and where loans were classified as standard accounts till March 2021 will be eligible for loan restructuring this time.

The moratorium of up to two years will be available to individuals and small and medium enterprises that did not restructure their loans in 2020 and were classified as standard accounts till March 2021.

Restructuring under the proposed framework may be invoked up to up September 30 and shall have to be implemented within 90 days thereafter, said Das.

Those who availed restructuring of their loans under the Resolution Framework 1.0, where the resolution plan allowed moratorium of less than two years, lending institutions are being permitted to use this window to modify such plans to the extent of increasing the period of moratorium or extending the tenure up to a total of two years, added the RBI governor.

RBI will give Rs 50,000 crore of liquidity support to banks for providing fresh lending "to a wide range of entities including vaccine manufacturers; importers/suppliers of vaccines and priority medical devices; hospitals/dispensaries; pathology labs; manufactures and suppliers of oxygen and ventilators; importers of vaccines and COVID related drugs; logistics firms and also patients for treatment," he said.