RBI extends relief to all MSMEs that was till now only available to GST registered MSMEs having credit facilities up to Rs.25 Crores to repay loan up to 180 days (as against 90 days) without being classified as NPAs. In order to enable other MSMEs for their transition to formalised sector (MSMEs) and also keeping in mind that these sectors are employment generating segments, the Central Bank in its policy announcements on June 6, 2018, said that “Having regard to the input credit linkage and associated issues, it has been temporarily allow banks and NBFCs to classify their exposure as per 180 days past due criterion, to all MSMEs with aggregate credit facilities up to the above limits, including those not registered under GST”. The above proposal of RBI gives great relief to Commercial Banks who have been overburden with NPAs. It is understood that the entities that do not get registered under GST by December 31, 2018, the asset classification in respect of dues payable from January 1, 2019, onwards shall immediately revert to the 90 days norms.
The conditions of 180 days past due criterion, to all MSMEs, including those not registered under GST, as a ‘standard’ asset, subject to the following conditions:
- The aggregate exposure, including non-fund based facilities, of banks and NBFCs to the borrower does not exceed ₹ 250 million as on May 31, 2018.
- The borrower’s account was standard as on August 31, 2017.
- The payments due from the borrower as on September 1, 2017 and falling due thereafter up to December 31, 2018 were/are paid not later than 180 days from their original due date.
- In respect of dues payable by GST-registered MSMEs from January 1, 2019 onwards, the 180 days past due criterion shall be aligned to the extant IRAC norms in a phased manner, as given below. However, for MSMEs that is not registered under GST as on December 31, 2018, the asset classification in respect of dues payable from January 1, 2019 onwards shall immediately revert to the extant IRAC norms.
|Period during which any payment falls due||
|September 1, 2017 – December 31, 2018||180 days|
|January 1, 2019 – February 28, 2019||150 days
|March 1, 2019 to April 30, 2019||120 days|
|May 1, 2019 onwards||May 1, 2019 onwards|