Borrowers get additional 60 days to repay loans: RBI
November 21, 2016  20:49
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The Reserve Bank of India has relaxed rules for classifying bad loans for small borrowers, saying they may need more time to repay their loan dues after the government withdrew Rs 500 and Rs 1,000 notes.

Banks and other financiers will get an additional 60 days for recognising housing, car, farm and other loans up to one crore as substandard, the RBI said in a notification.

The relaxation will apply to dues payable between November 1 and December 31, it said.  

The government's sudden decision earlier this month to pull high value banknotes took out 86 per cent of the money out of circulation and in the cash crunch that has followed, the ability of many borrowers to pay EMIs has been affected.

With withdrawals being restricted per account, many loan borrowers have been unable to get dues on time from creditors, limiting their options to repay their loan dues.

Also, normal banking activities, including clearing of cheques, have been severely hampered after the government's announcement, with bankers having to first serve people who have been queuing up for a one-time exchange of old notes for new ones at bank counters.

"It is a welcome move by the RBI as many customers have expressed their inability to repay dues in time because of the ongoing demonetisation drive," said Harshil Mehta, CEO of housing finance company DHFL.
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