The Reserve Bank of India (RBI) on 5 May 2021 announced the Resolution Framework - 2.0 aimed at the revival of Covid-19 related stressed Micro, Small, and Medium Enterprises (MSMEs). A circular was published by the RBI on 5 May 2021 titled "Resolution Framework 2.0 – Resolution of Covid-19 related stress of Micro, Small and Medium Enterprises (MSMEs)".
Clause 2 of the above circular specifies the eligibility conditions for MSME accounts to be considered for restructuring under the framework, which inter alia include sub-clause (iii) which states that the aggregate exposure, including non-fund based facilities, of all lending institutions to the MSME borrower should not exceed ₹25 crore as on 31 March 2021.
Based on a review, it has been decided to enhance the above limit from ₹25 crore to ₹50 crore.
Consequently, clause 2(v) would stand modified as under:
“(v) The borrower’s account was not restructured in terms of the circulars DOR.No.BP.BC/4/21.04.048/2020-21 dated 6 August 2020; DOR.No.BP.BC.34/21. 04.048/2019-20 dated 11 February 2020; or DBR.No.BP.BC.18/21.04.048/2018-19 dated 1 January 2019 (collectively referred to as MSME restructuring circulars) or the circular DOR.No.BP.BC/3/21.04.048/2020-21 dated 6 August 2020 on “Resolution Framework for COVID-19-related Stress.”
All other provisions of the circular remain unchanged.
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