Dev Singhraha
Relocation Expert
Demonetisation has really hit the country real hard. In this worrying atmosphere, the Reserve Bank of India has provided people with a bit of relief and relaxation by giving the borrowers a time span of another thirty days i.e. over and above the sixty days of the repayment of car, farm, housing or any other loan which is worth the amount of one crore, the RBI announced this on Wednesday which is the 21st of November.

So now the borrowers will have a total time of ninety days for getting their account classified under the NPA category i.e. the Non-Performing Asset. This exception will be applicable only on the dues which are payable between 1st of November to the 31st of December 2016. There was a fear of rising of loan default as the repayment capacity of all the borrowers were largely impacted by the surprise implementation of flushing out of old cash by Prime Minister Narendra Modi. This implementation has adversely affected all the businesses.
 
Due to the demonetization of the higher value notes such as Rs 500s and Rs 1000s, there has been an adverse effect on the banking activities and functioning which includes clearing of the cheques. Now just that the borrowers are facing problems in getting money from the creditors as there are restrictions such as cash withdrawal of only Rs 24,000 in one week. This restricted cash withdrawal limits their options for repaying the dues. As per the notification, the running working capital accounts or the crop loans which have the sanctioned limit of one crore or less, they will be eligible to avail this benefit.
 
It was also stated that all the regulated entities will be permitted to put off the downgrade of the account that is standard on the 1st of November but, the condition remains that it would have to become Non Performing Asset for any reason within November and December (in the time span of 90 days from date of downgrade). The extra time of ninety days is given to defer classification of an existing standard asset as a sub-standard and not for the delay of migration of an account.

All the dues that are payable after 1st of January, they will be covered under the instructions for respective entities. Along with RBI coming out with a notification to provide extra sixty days, even the central bank separately come out with a special immunity for the farm loans.
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