The Reserve Bank of India Governor announced on Friday that the moratorium permitted by it on March 27 due to COVID-19 situation can be excluded from the 90-day period for Non Performing Assets(NPA) classification of accounts which were standard as on March 1.
"It has been decided that in respect of all accounts for which lending institutions decide to grant moratorium or deferment, and which were standard as on March 1, the 90-day NPA norm shall exclude the moratorium period. That is, there will be asset classification standstill for all such accounts from 1st March 2020 to 31st May 2020", the RBI Governor said.
On March 27, the RBI had permitted lending institutions to extend moratorium from March 1, 2020 till May 31,2020 with respect to amounts which fall due after March 1.
In the press address made on Friday, Mr Shaktikanta Das said that the RBI has taken note of the fact that the COVID-19 situation has prevented the borrowers from honoring their commitments which were due even before February 29 in standard accounts.
"Economic activity has come to a standstill during the period lockdown", RBI Governor noted.
The other key points from the announcement are :
NBFCs can grant relaxed NPA classification to their borrower under prescribed accounts standards.
These announcements were made to provide stimulus to the economy which has been affected severely by the COVID-19 pandemic and the lockdown.
Humanity faces trial of its time with COVID Pandemic. Our Mission is to do whatever it takes. In this environment, RBI has been very proactive : RBI Governor @RBI— Live Law (@LiveLawIndia) April 17, 2020
Humanity faces trial of its time with COVID Pandemic. Our Mission is to do whatever it takes. In this environment, RBI has been very proactive : RBI Governor @RBI
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