The Reserve Bank of India (RBI) may allow banks to extend the moratorium on loan EMIs beyond the August 31 deadline, considering the prolonged impact on companies due to the coronavirus pandemic.
Companies, particularly in stressed sectors such as hospitality, automobiles and aviation, might be given a breather, sources told Mint. The central bank has started impact assessment – including gathering data on repayment and cash flows of borrowers during the lockdown, to gain “better understanding of the challenges faced by borrowers,” they added.
Moneycontrol could not independently verify the report.
One of the sources said while the moratorium extension for certain segments beyond August is a “foregone conclusion” as the RBI expects some sectors to continue requiring support from lingering economic pains, the “fine print is still a work in progress.”
India went under a country-wide lockdown from March 25, which was lifted in phases from June 1 and businesses were forced to shut shop completely during the period. Many states and some regions still continue to be under lockdown due to growing number of COVID-19 cases.
A second source said certain sectors like automobile and hospitality could see moratorium period extended, but the same is “unlikely to be extended to individual borrowers.”
RBI did not respond to queries regarding the same, the paper said.
Documents and disclosures have shown as much as 29 percent bank loans and 59 percent non-banking finance company (NBFC) loans are under a moratorium for the period April-June. This is over 30 percent of all loans amounting to Rs 28.3 lakh crore, as per the report.
The amount under moratorium could drop to Rs 16.22 lakh crore by Q1FY21 once the economy gets back on its feet, it added.
Source:- moneycontrolc.com