The RBI’s announcement of re-opening one-time restructuring for individuals and MSMEs till September 30, comes as a great relief. Further in cases where, individual borrowers and small businesses who have availed restructuring of their loans under Resolution Framework 1.0, lending institutions will be allowed to use the permitted 2 years window to modify such plans to the extent of increasing the period of moratorium and/or extending the residual tenor up to a total of 2 years. This welcoming move was the need of the hour, since individuals and businesses have been gravely affected by the pandemic’s second wave and lockdown-like situations, resulting in an acute economic stress on states. The RBI’s decision will provide the necessary headroom to the financial institutions to effectively re-evaluate their working capital and will work towards positively impacting the general sentiment in the economy
