However, banks will not be able to retain the 'standard' asset classification status of the loan accounts in such cases.
The pandemic caused construction delays at its ongoing projects due to several factors such as lockdowns enforced by government agencies, work-stoppage orders, disruptions in the supply of materials and shortage of labour resulted in failure to meet development milestones.
RBI and Sebi are close to reaching an agreement for providing waiver of existing norms to banks.
The Reserve Bank of India (RBI) has clarified that loans which have remained standard without any defaults as of March 1, 2020, will be eligible for restructuring under the pandemic-related resolution framework issued in August.
The RBI left the policy rates unchanged in Tuesday''s sixth bi-monthly monetary policy review.
Observing that MSME sector plays an important role in the growth of the Indian economy, RBI said the restructuring of the borrower account has been extended by further one year to March 31, 2021.
Reserve Bank of India Governor Shaktikanta Das on Friday said the central bank will ensure adequate liquidity in the system to ease the financial stress caused by the Covid-19 pandemic. The central bank reduced the reverse repo rate -- the rate at which banks park their fund with the central bank -- by 25 basis points to 3.75 per cent.
RBI said that it has decided that banks may refinance such loans by way of full or partial take-out financing.
The Reserve Bank on Monday eased norms for structuring of existing long-term project loans to infrastructure and core industries, to revive stalled plans and help banks tide over mounting bad loans.
The ministry seeks to make lending requirements flexible for banks financing key stalled projects.
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