According to the prevailing RBI guidelines, the restructuring of loan accounts is only applicable to those MSMEs (Micro, Small and Medium Enterprises) which are registered under Goods and Services Tax (GST) and the numbers of such MSMEs are quite low. The demand of restructuring of loan accounts of all the MSMEs made by IBA (Indian Banks’ Association) showcase an effort towards the proper utilization of the mentioned policy across the whole MSME sector.

In mid April, RBI has asked the banks to make an additional provisioning of 10% for all the accounts of term loans. However, according to IBA, this step would definitely put pressure on the books of the lenders, who are also looking for economic stability amid the COVID19 crisis, leading to the reduction in their profitability.

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