MSME RESOLUTION

THE JAIN SAHAKARI BANK LTD

 

POLICY FOR RESOULTION FRAME WORK 2.0 RESOLUTION OF COVID – 19 RELATED STRESS OF MICRO, SMALL & MEDIUM ENTERPRIESES ( MSMEs )

 

RBI has decided to extend the facilities as mentioned in their earlier circular DOR No. BP. BC / 4 / 21.04.048 / 2020 – 21 dated 06.08.2020 on restructuring of advances to MSMEs borrowers due to uncertainties created by the resources of the COVID – 19 pandemic

 

IMPLICATION & INTERPRETATION

The intent is to assist all those borrowers whose debt service is affected because of disruption of business due to resurgence of COVID – 19 pandemic. The borrower has to seek relief with justification for availability of the package offers by RBI

INTERPRETATION

The RBI has extended the facility for restructuring without a downgraded in the asset classification subject to :

1) Constituents normal course of business is affected due to the resurgence of pandemic

2) Pandemic has caused a burden on debt service as cash flows are affected

3) The borrower shall be classified as Micro, Small or Medium Enterprises as on 31.03.2021 in terms of the Gazette notification S.O. 2119 ( E ) dated 26.06.2021

 

DEFINITION OF MSME

A) MICRO – Investment in a Plant & Machinery or Equipment does not exceed 1crore rupees & turnover does not exceed 5 crore rupees

B) SMALL – Investment in a Plant & Machinery or equipment does not exceed 10 crore rupees & turnover does not exceed 50 crore rupees

C) MEDIUM – Investment in a Plant & Machinery or equipment does not exceed 50 crore rupees & turnover does not exceed 250 crore rupees

4) The borrowing firm must be a GST registered on the date of implementation of the restructuring of advances. This condition will not apply to MSMEs that are exempt from GST Registration

5) The aggregate exposure including non – fund based facilities of all lending institutions to the borrower does not exceed Rs. 25 crore on 31.03.2021

6) The account of borrower should be standard as on 31.03.2021 7) The borrower account was not restructured earlier vide MSMEs various circulars issued by RBI time to time.

 

IMPLEMENTATION

1) Restructuring in the form of · Rescheduling of payments maximum 7 years on case to case basis · Conversion of interest accrued or to be accrued into another credit facility · Revision in working capital sanctions · Request for moratorium

2) The above measures shall be applicable to those accounts which are suffered due to economic fallout from COVID – 19. Further, accounts provided relief by the bank will be subject to supervisory review as to justifiability.

 

 

Executive Officer Chief Executive Officer


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