The Union government is considering a proposal to extend the non-performing asset (NPA) classification period for loans to micro, small and medium enterprises (MSMEs) from the existing 90 days to 180 days, according to a senior government official who requested anonymity.

“The proposal to extend the loan default period for MSMEs from 90 days to 180 days is likely to be taken up by the Cabinet soon,” the official said.

The move is expected to provide relief to cash-strapped MSMEs, especially against the backdrop of steep US tariffs, giving them more time to regularise their loan repayments.

News source: Business Standard