The Reserve Bank of India (RBI) has relaxed loan repayment norms for small borrowers. Those who have failed to repay their loan on time now get an additional 30 days to repay, over and above the 60 days.
The move came after the RBI got several requests from borrowers expressing their inability to repay their loans in the wake of demonetisation.
The relaxation is applicable to the category of borrowers who are referred to in banking parlance as substandard asset. The maximum limit of the sanctioned loan, however, must be below Rs one crore.
Those who default on their repayment for over 90 days are categorised as Non Performing Assets or NPAs.
The nation is facing a cash crunch following government's decision to ban the use of old Rs 500 and 1000 notes on November 8.