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Amid concerns regarding most of the players of NBFCs are unable to revive their businesses, Non-banking finance companies (NBFCs) have requested the Reserve Bank of India (RBI) to extend the one-time restructuring scheme of MSME advances till March 31, 2022. In February last year, the RBI had permitted one-time restructuring of existing MSME advances, classified as 'standard' without downgrade in the asset classification subject to certain additional provisioning and other compliances.

The time limit for implementation of the scheme was till December 31, 2020. Recently, Finance Industry Development Council (FIDC), an industry body of NBFCs, written to RBI Governor Shaktikanta Das that due to the severe second wave of COVID-19, the micro, small and medium enterprises (MSMEs) have not been able to revive their economic activities and are in urgent need of support from the lenders. FIDC wrote ‘Considering the challenging environment for MSMEs and lenders, it will be helpful, if the RBI extends the restructuring scheme till at least March 31, 2022’.

NBFCs primarily cater to the funding needs of micro, small and medium enterprises (MSME), including retail and wholesale traders. The industry body also urged the RBI to allow restructuring of certain MSMEs loans that already have got similar relief under the same scheme during the first wave of COVID-19, but are now facing challenges. The FIDC has also requested the central bank to provide priority status lending (PSL) classification benefit for bank lending to NBFCs on a permanent basis. The industry body urged the RBI to allow bank refinance against the existing unencumbered MSME pool originated by NBFCs.