The Reserve Bank of India (RBI) on August 21, 2020 has issued a circular on Ad-hoc, Short Review, Renewal of Credit Facilities. It has been seen that the credit facilities were not renewed timely. Further, the banks are now expected to have a detailed Board Policy formulating a methodology for periodic renewal of the credit facilities, according to the regulatory guidelines, adhering to the rules and regulations provided under master circular no. DCBR.BPD. (PCB) MC No. 12/09.14.000/2015-16 dated July 01, 2015.
Further, the Board has stated that the timely renewal of the credit facilities shall be there in the loan approval policy of the banks and without any justifiable reason, the banks should not fall short on the renewal of the credit facilities. In addition to this, banks are required to record all the data relating to the renewal of the credit facilities and shall furnish it for inspection or audit as and when required.
[Circular No. DOS.CO.PPG.BC.1/11.01.005/2020-21]
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