GST-hit MSMEs get more time to pay dues

gst-msme
Additional 180 days for borrowers: RBI

The Reserve Bank of India (RBI) has allowed the micro, small and medium enterprises (MSMEs), whose cash flow was hit due to implementation of Goods and Service Tax (GST), additional time to pay their dues to the banks and non-banking finance companies.

Registered borrowers

MSMEs with exposure of less than ₹25 crore will get additional 180 days to pay their dues, provided the borrower is registered under the GST regime and the borrower account was standard as on August 31, 2017. “The amount from the borrower overdue as on September 1, 2017 and payments from the borrower due between September 1, 2017 and January 31, 2018 are paid not later than 180 days from their respective original due dates,” RBI said.

At present, banks and NBFCs classify a loan account as non-performing asset (NPA) if payment is due for more than 90 day and 120 day respectively.

However, lenders have been asked to make a provision of 5% for such accounts. “The provision in respect of the account may be reversed as and when no amount is overdue beyond the 90/1201 day norm,” RBI said.

Source:http://www.thehindu.com/business/gst-hit-msmes-get-more-time-to-pay-dues/article22681508.ece

Print Friendly, PDF & Email

Leave a Reply

Your email address will not be published. Required fields are marked *