The Reserve Bank of India on Wednesday extended the small loans repayment window by 30 days, now allowing 90 days for those with housing, car, farm, and other loans worth less than Rs 1 crore. “On a review, it has been decided to provide 30 days, in addition to the 60 days provided (on November 21),” the RBI notification said.
The rule applies to loans payable between November 1 and December 31 this year. On November 21, the central bank had offered an extra 60 days to those with such loans. Those with running working capital accounts, where the sanctioned limit is Rs 1 crore, term loans for business purposes with the same limit, loans by non banking finance companies and micro finance institutions are among those who can avail of the window.
The announcement is part of the apex bank’s measures to ease the cash crunch caused by the Centre’s move demonetising Rs 500 and Rs 1,000 notes. The high-value currency notes made up around 86% of the country’s liquidity when the decision was announced on November 8. The RBI’s decision is reportedly to ease fears of an increase in loan defaulting after demonetisation.