Bankers and NBFCs do not want the moratorium to be extended further

Mumbai, Ta. 31 July 2020, Friday

Banking and non-banking financial companies (NBFCs) have started chanting that the moratorium announced by the Reserve Bank should not be extended beyond August 31 due to Corona. Borrowers who are able to repay the loan installments even though they do not pay it, which has affected the cash flow of banks and NBFCs.

Restructuring loans at a time should be allowed rather than lengthening the moratorium, a banker said. Restructuring of loans on a case-by-case basis would be appropriate. Loans can be restructured by extending interest rates and repayment periods so that cash flow can continue, he said. Another banker said this was suggested in a recent meeting with the government and the Reserve Bank.

A meeting with the Prime Minister also drew his attention to the issue. Amidst the economic impact of the corona, the moratorium has been provided for a total of six months to relieve the borrowers, which is coming to an end on August 31.

However, the number of beneficiaries of the moratorium has dropped significantly in the second three months as compared to the first three months, a banker said. Extending the moratorium would be unfair to loanholders who make regular repayments.