What changed
RBI issued a new direction effective immediately, providing a moratorium/deferment window for eligible export borrowers from September 1 to December 31, 2025. Borrowers must be in export sectors listed in the annex, have outstanding export credit as of August 31, 2025, and have standard accounts as of that date. Interest during the moratorium accrues on simple interest basis only, and accumulated interest can be converted into a funded interest term loan repayable by September 30, 2026.
What it means for you
Banks can now offer temporary relief to viable export businesses hit by global headwinds, without classifying the relief as restructuring. This helps preserve asset quality for lenders while supporting borrower cash flows. However, banks must frame and disclose a policy with objective criteria for granting relief, and ensure borrower eligibility is verified.
What you must do
- Frame a policy for providing these relief measures, including objective eligibility criteria, and disclose it in public domain.
- Identify eligible export borrowers with outstanding export credit as of August 31, 2025, and standard account status on that date.
- For working capital facilities, consider recalculating drawing power by reducing margins or reassessing limits during the effective period.
- Ensure interest during moratorium/deferment is applied on simple interest basis only, with no compounding.
- Convert accumulated accrued interest into a funded interest term loan repayable after March 31, 2026, but no later than September 30, 2026.
Who it affects
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 (only for reporting paragraph 16)
Which borrowers are eligible for these relief measures?
Borrowers engaged in exports of sectors listed in the annex, with outstanding export credit as of August 31, 2025, and whose accounts with all REs were classified as 'Standard' as on that date.
What relief is available for working capital facilities?
REs may defer recovery of interest applied on CC/OD facilities during the effective period (Sep 1 to Dec 31, 2025). Interest accrues on simple basis without compounding. Accumulated interest can be converted into a funded interest term loan repayable by September 30, 2026.
Do we need to treat this as a restructuring?
No, the directions are issued under RBI's statutory powers and are separate from restructuring frameworks. However, banks must follow the policy and eligibility criteria specified in the directions.