Non-banking finance companies (NBFCs) have requested the Reserve Bank of India (RBI) to extend the one-time restructuring scheme of MSME advances till 31st March, 2022, as these entities are unable to revive their businesses.
As in February The RBI had permitted a one-time restructuring of standard Micro, Small and Medium Enterprise (MSME) advances, keeping in view the COVID-19 pandemic. The time limit for implementation of the scheme was till 31st December, 2020.
Now, the Finance Industry Development Council (FIDC), an industry body of NBFCs, in a recent letter written to RBI Governor has said due to the severe second wave of COVID-19, the MSMEs have not been able to revive their economic activities and are in urgent need of support from the lenders.
“Considering the challenging environment for MSMEs and lenders, it will be helpful, if the RBI extends the restructuring scheme till at least 31st March, 2022,” FIDC wrote.
Further, the FIDC has also requested the central bank to provide priority status lending (PSL) classification benefit for bank lending to NBFCs on a permanent basis. Earlier this month, the RBI extended the PSL benefit by six months till 30th September, 2021. The industry body urged the RBI to allow bank refinance against existing unencumbered MSME pool originated by NBFCs.