: RBI issues Sep 30 as deadline for NBFCs to comply with new NPA norms for MSME accounts #FinanceIndia #StockMarketNEWS RBI issues Sep 30 as deadline for NBFCs to comply with new NPA norms for MSME accounts

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RBI issues Sep 30 as deadline for NBFCs to comply with new NPA norms for MSME accounts #FinanceIndia #StockMarketNEWS
RBI issues Sep 30 as deadline for NBFCs to comply with new NPA norms for MSME accounts New Delhi, Feb 16 (KNN) The Reserve Bank of India (RBI) has extended the deadline for Non-bank financial institution (NBFCs) to comply with the new Non Performing Asset (NPA) norms applied to micro, small and medium enterprises (MSME) accounts to 30th September, 2022.

The announcement gives a push to the earlier date which was 31st March, 2022, allowing NBFCs a time period of 6 months to move to the new rules issued on 12th November, 2021.

Based on several queries it received, the RBI has issued clarifications stating the definition of ‘out of order’, as clarified in the Circular, shall be applicable to all loan products being offered as an overdraft facility, including those not meant for business purposes and/or which entail interest repayments as the only credits.

In case of borrowers having more than one credit facility from a lending institution, loan accounts shall be upgraded from NPA to standard asset category only upon repayment of entire arrears of interest and principal pertaining to all the credit facilities, said the regulator.

The Central Bank has also clarified that the ‘previous 90 days period’ for determination of ‘out of order’ status of a CC/OD account shall be inclusive of the day for which the day-end process is being run.

Further it has said that, paragraph 10 of the Circular stipulates that loan accounts classified as NPAs may be upgraded as ‘standard’ asset only if entire arrears of interest and principal are paid by the borrower. NBFCs shall have time till September 30, 2022 to put in place the necessary systems to implement this provision.

All other instructions of the Circular shall continue to be applicable as per the timelines specified therein, said the notification.

(KNN Bureau)