Money & Banking

KCCI seeks extension of NPA classification period

Our Bureau Mangaluru | Updated on May 05, 2021

Stressed Asset Restructure Scheme should be extended and norms eased to expand coverage, says industry body

The Kanara Chamber of Commerce and Industry (KCCI) has sought several measures, including lenient NPA norms, to save MSMEs (micro, small and medium enterprises) affected by Covid pandemic.

Reacting to the measures announced by RBI on Wednesday to alleviate finance constraints of various stakeholders, Isaac Vas, President of KCCI, told BusinessLine that MSMEs are in critical condition because of the decline in business for the past one year due to Covid pandemic.

He said NPA classification period should be doubled to 180 days. This will help MSMEs to manage their finances better without pressure, he said.

Seeking the immediate implementation of Stressed Asset Restructure Scheme, he said the last date should be extended till March 31, 2022. RBI should ease norms of applicability to cover more MSMEs with NPA and monitor implementation of the scheme, he said.

In respect of working capital facilities sanctioned in the form of cash credit/overdraft (CC/OD), lending institutions were permitted to defer till March 31 2021. “This has put MSMEs under pressure because of continued pandemic effect. We request RBI to extend the repayment due date till March 31 2022,” he said.

Stating that lockdown and restrictions on trade have aggravated the conditions, he said this would put immense economic burden on manufacturers and would potentially lead to closures and loss of jobs. “It is our estimate that thousands of units across India would be directly impacted leading to loss of jobs,” he said.

Published on May 05, 2021

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