The Reserve Bank of India in its notification dated 17th April 2020 has decided to provide a relief to the standard bank accounts availing a loan moratorium between March 1 and May 31.
RBI has decided that the payment moratorium period of 3 months, which lending institutions have been permitted to grant as per RBI’s announcement on March 27, 2020, will not be considered while classifying assets as NPAs. i.e., the moratorium period will be excluded while considering 90-day NPA norm for those accounts for which lending institutions decide to grant moratorium or deferment and which were standard as on March 1, 2020. NBFCs will have the flexibility under the prescribed accounting standards to provide such relief to their borrowers.
Simultaneously, banks have been asked to maintain higher provision of 10% on all accounts whose classification has been put on a standstill as above, so that banks maintain sufficient buffers.
Click here to read the Notification.
