On March 27, 2020 (Friday), the Monetary Policy Committee (MPC) of RBI announced certain regulatory measures to mitigate the burden of debt servicing brought about by disruptions on account of COVID-19 pandemic and to ensure the continuity of viable businesses. With regard to rescheduling of Term Loans, Working Capital payments, and NPA classification certain common…
Today (Monday, March 23, 2020), RBI advised commercial banks that their loans to registered NBFCs (other than MFIs) for on-lending to be eligible for classification as priority sector is extended for FY 2020-21. The circular further said that existing loans disbursed under the on-lending model will continue to be classified under the Priority Sector till…
The Reserve Bank of India (RBI) on Friday (March 13, 2020) lowered the single borrower and group exposure limit for urban cooperative banks (UCBs) to 15% and 25% of tier I capital, respectively, to reduce concentration risks arising out of such large loans. As per RBI Cir.No.44/13.05.00/2004-05 dated April 15, 2005, Primary (Urban) Co-operative Banks…
Reserve bank of India advised all the scheduled commercial banks that with effect from April 1, 2020, Short Term Crop Loans should be extended only through KCC to be eligible for Interest Subvention Scheme (ISS) and Prompt Repayment Incentive (PRI). According to the notification, the Ministry of Agriculture & Farmers Welfare vide their Office Memorandum,…
External benchmark rate means the reference rate which includes the policy Repo rate of RBI, Government of India’s 3-Months and 6-Months Treasury Bill yields published by Financial Benchmarks India Private Ltd (FBIL), and any other benchmark market interest rate published by FBIL. The interest rate on banks’ lending based on external benchmark shall be reset…
RBI permits one-time restructuring of MSME advances till December 31, 2020 RBI on Tuesday (11.02.2020) allowed a one-time restructuring of existing loans extended to MSMEs by Banks and NBFCs and permitting them to classify such assets as ‘Standard’ without a downgrade in the asset classification if the following conditions are met. • The aggregate of…
Reserve Bank on Wednesday (February 5, 2020) said that the statutory auditor’s certificate in respect of interest subvention claim may be submitted by June 30, 2020, and in the meantime settle claims based on internal/concurrent auditor certificate. As per earlier covenants, the interest subvention would be released only on the basis of claim duly certified…
Agriculture is back bone of Indian economy which provides employment and livelihood to a large section of the Indian population. As per ILO estimate of 2018, approximately 44% of the working population is employed in the agriculture and allied sector. The vast farming area, diverse agriculture and a large population dependent on agriculture and also…
[This writing provides insight of internal and external causes of rural indebtedness, challenges before banks and financial institution in rural areas, operation of formal and informal lending system in rural areas and discusses experts’ suggestion on facing high level of delinquency in lending to agriculture sector especially to small and marginal farmers, oral lessees, tenant…
National Agriculture Market (eNAM) is a pan-India electronic trading portal which networks the existing APMC mandis to create a unified national market for agricultural commodities. The scheme envisages the implementation of the NAM by setting up of an appropriate common e-market platform that would be deployable in selected 585 regulated wholesale markets in States /…