The Reserve Bank of India (RBI) has provided some relief to small borrowers and firms struggling to make repayments on their loan dues due to a shortage of cash. In a press release issued on Monday, the RBI offered an additional 60-days to certain categories of borrowers to make good on their dues.
The relief extends to non-banking finance companies (NBFCs) and microfinance institutions (MFIs) which have seen collections fall sharply due to the shortage of currency.
Borrowers with loans up to Rs 1 crore from banks and finance companies would be eligible for this relaxation, RBI said.
The decision was taken following representations from the industry suggesting that small borrowers may need additional time to repay dues due to the cancellation of Rs 500 and Rs 1000 notes, said the RBI.