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Directions on Trade Relief Measures

Reserve Bank of India (RBI) has issued directions on trade relief measures in respect to credit facilities extended by regulated entities.

To whom shall the directions be applicable?

The directions shall be applicable to the following Regulated Entities (REs) –

  • Commercial Banks
  • Primary (Urban) Co-operative Banks, State Co-operative Banks and Central Co-operative Banks
  • Non-Banking Financial Companies (including Housing Finance Companies)
  • All-India Financial Institutions
  • Credit Information Companies

What are the eligibility criteria for the trade relief?

  • RE shall satisfy itself that the borrower’s business is impacted by trade disruptions caused by global headwinds.
  • For the purpose of considering relief, a borrower shall be deemed to be eligible upon fulfilment of all of the following conditions –
    • The borrower is engaged in exports relating to any of the sectors specified in the directions.
    • The borrower had an outstanding export credit facility from a RE as of August 31, 2025.
    • The accounts of the borrower with all REs were classified as ‘Standard’ as on August 31, 2025.
  • REs other than those which have sanctioned the export credit facility to the borrower may satisfy themselves that the borrower qualifies under the above criteria, basis a certification to be obtained from the REs which have extended export credit to the borrower.

What relief measures may be extended by REs?

  • Moratorium / Deferment – 
    • In respect of all term loans, a RE may grant a moratorium on payment of all instalments (principal and / or interest) falling due between September 1, 2025 and December 31, 2025 (i.e. effective period).
    • In respect of working capital facilities sanctioned in the form of cash credit / overdraft, a RE may defer the recovery of interest applied in respect of all such facilities during the effective period.
    • During the moratorium / deferment period, interest shall continue to accrue. However, interest application shall be on simple interest basis, without compounding effect, i.e., there shall be no interest on interest.
    • The accumulated accrued interest during moratorium / deferment period may be converted into a funded interest term loan which shall be repayable in one or more instalments after March 31, 2026, but not later than September 30, 2026.
    • In respect of working capital facilities, a RE may, at its discretion, recalculate ‘drawing power’ by reducing the margins and / or reassess the working capital limits, during the effective period. 
  • Extension of tenor for Export Credit – 
    • RE eligible to undertake export financing business may permit an enhanced credit period of up to 450 days for pre-shipment and post-shipment export credit disbursed till March 31, 2026.
    • In respect of packing credit facilities already availed by exporters on or before August 31, 2025, where dispatch of goods could not take place, a RE may allow liquidation of such facilities from any legitimate alternate sources, including domestic sale proceeds of such goods or substitution of contract with proceeds of another export order.

What are the directions on asset classification and provisioning?

  • The moratorium period / deferment shall be excluded by the RE while calculating the number of days past-due for the purpose of asset classification.
  • Grant of moratorium / deferment of instalments and recalculation of the ‘drawing power’ shall not be treated as an event of restructuring. Consequently, such a measure, by itself, shall not result in asset classification downgrade.
  • REs shall report to the Credit Information Companies (CICs) as per the extant instructions, duly taking into account the above provisions.
  • In respect of eligible borrower accounts which were in default but classified as ‘standard’ as on August 31, 2025, and where relief measures have been extended, a RE shall make a general provision of atleast 5% of the total outstanding in such accounts, by December 31, 2025.
  • The above general provision may be adjusted against the actual specific provisioning requirements for slippages from these borrower accounts. Any residual general provisions at the end of the financial year 2025-26 shall be either written back or adjusted against the provisions required for all other borrower accounts by June 30, 2026.
  • The above general provisions shall not be reckoned for arriving at net NPAs till they are adjusted against the actual provisioning requirements. Further, till such adjustments, these provisions shall not be netted from gross advances but shown separately in the balance sheet as appropriate.


References

Reserve Bank of India. (2025, November 14). 'Reserve Bank of India (Trade Relief Measures) Directions, 2025'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12921&Mode=0


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