Loan borrowers in the knitwear sector here will get a huge relief as the Reserve Bank of India has relaxed the non-performing assets (NPA) delinquency norms for those micro, small and medium enterprises registered under Goods and Services Tax. According to the new norms, the amount from the borrower overdue as on September 1, 2017, and payments from the borrower due between September 1, 2017 and January 31, 2018 are paid not later than 180 days from their respective original due dates, would be treated as standard assets in the books of the banks.
“Even though the condition says that only those MSMEs registered under GST having an aggregate credit facility of less than Rs. 25 crore gets this relief, it is a big breather for many of the units in Tirupur knitwear cluster,” said S. Dhananjayan, a chartered accountant. M. Velusami, vice-president of Tirupur Exporters Association, said that the apex bank’s decision would help units in capital intensive clusters like Tirupur as the sector was going through a transition phase under GST and facing difficulties to meet repayment obligations to the banks.