The Reserve Bank of India vide its notification dated 7th February 2020 has revised the guidelines for Deferment of Commencement of Commercial Operations (DCCO) in non-infrastructure and Commercial Real Estate (CRE) sectors.
Key Highlights:
Revisions of the date of DCCO and consequential shift in repayment schedule for equal or shorter duration will not be treated as restructuring if the revised DCCO falls within the period of one year from the original DCCO.
Further, if the projects gets delayed for reasons beyond the control of promoter(s), banks are allowed to restructure them by way of revision of DCCO up to another one year and retain the ‘standard’ asset classification if the account continues to be serviced as per the revised terms and conditions under the restructuring.
Banks while restructuring such CRE project loans as above will have to ensure that the revised repayment schedule is extended only by a period equal to or shorter than the extension in DCCO and at the time of extending DCCO, Boards of banks should satisfy themselves about the viability of the project and the restructuring plan.
Click here to read the Notification.
