New Delhi, Apr 19 (KNN) In the wake of COVID-19 severe second wave, FIDC, an industry body of NBFCs has urged the Reserve Bank of India (RBI) to extend the One-Time Restructuring Scheme for loans to MSMEs till March next year.

In February last year, the Reserve Bank 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 said restructuring was till December 31, 2020.

Reportedly, in a letter to RBI Governor Shaktikanta Das, Finance Industry Development Council (FIDC) Director General Mahesh Thakkar said that due to the severe second wave of COVID-19, the MSMEs, as also the retail and wholesale trader industry, have not been able to revive their economic activities and therefore, are in urgent need of support from the lenders.

"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," the FIDC said.

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 RBI on April 7, 2021, extended PSL classification for lending by banks to NBFCs for on-lending by six months, till September 30, 2021.

FIDC also urged the apex bank to allow bank refinance against the existing unencumbered MSME pool originated by NBFCs.