On January 6, 2021, Bank of Baroda (BoB) has signed a memorandum of understanding (MOU) with the Small Industries Development Bank of India (SIDBI) to enable micro, small and medium enterprises (MSMEs) customers of the former to apply online for one-time restructuring (OTR).
- With this, the eligible MSME entities can get credit exposure up to Rs 25 crore.
- The restructuring of the borrower account will be implemented by March 31, 2021.
How will this be helpful for MSMEs?
–The MSME Customer can now access the web-based portal, ‘Asset Restructuring Module for MSMEs (ARM-MSME)‘.
–This portal enables customers to self-create their restructuring proposal with financial viability projections by entering only the most essential data of their past and projected financials.
–MSME borrowers can do the process of application submission online for the restructuring of loan accounts from the comfort of their home/office for free of cost.
–Apart from this, the borrowers can also re-submit a new online application or modify the online application.
Reason behind this Decision:
The MSMEs are affected by financial stress due to the Covid-19 pandemic. In this regard, the Reserve Bank of India (RBI) has allowed banks to consider OTR proposals from MSMEs with credit exposure up to Rs 25 crore.
What is a one-time restructuring (OTR) scheme by RBI?
On August 6, 2020, RBI announced OTR scheme allowing banks to restructure loans of borrowers that were regular in their repayments and did not have more than 30 days overdue as of March 1, 2020, without downgrading their asset classification to a non-performing asset. This was announced as a regulatory measure to mitigate the impact of COVID-19 on the borrowers.
- The recommendations for the OTR framework were provided by the Kamath Committee led by Kundapur Vaman Kamath.
- RBI extended the One-Time Restructuring (OTR) window till March 2021.
Recent Related News:
i.On November 4, 2020 Bank of Baroda (BoB) in association with EAP India introduced an ‘Employee Assistance Program’, a Well-being Programme for its employees and their family members 24×7.
ii.In July 2020 BoB launched ‘Insta Click Savings Account’, a 100% paperless digital self-assisted online savings account.
About Bank of Baroda (BoB):
Vijaya Bank and Dena Bank were merged with BoB
Managing Director (MD) and Chief Executive Officer(CEO)– Sanjiv Chadha
Headquarters– Vadodara (earlier known as Baroda), Gujarat
Founded– 20 July 1908, by Maharaja Sayajirao Gaekwad III of Baroda
Tagline– India’s International Bank