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New Delhi, May 4 () With further extension of the nationwide lockdown, the RBI is considering a proposal for extending the moratorium on bank loans by another three months to help people and industry impacted by the ongoing lockdown to contain COVID-19.Suggestions from various quarters, including from Indian Banks' Association, have come for the further extension of moratorium and the RBI is actively considering them, according to sources.The government on Saturday extended the lockdown for further two weeks till May 17 with certain relaxations for red, orange and green zones.Income stream will not resume due to the continuation of nationwide lockdown, the sources said, adding that so many entities and individuals will be unable to service their debt in this circumstances at the end of the present moratorium period ending on May 31.So, extension of moratorium by another three months would be a practical approach from the regulator, a senior public sector bank official said.It will help both borrowers and banks in these difficult times, the official added.The Reserve Bank of India (RBI) had on March 27 allowed banks and financial institutions to offer a moratorium of three months on payment of instalments of all term loans outstanding as on March 1 to help mitigate hardship faced by borrowers."All commercial banks (including regional rural banks, small finance banks and local area banks), co-operative banks, all -India Financial Institutions, and NBFCs (including housing finance companies and micro-finance institutions) ("lending institutions") are being permitted to allow a moratorium of three months on payment of instalments in respect of all term loans outstanding as on March 1, 2020," the RBI had said.Accordingly, it had said, the repayment schedule and all subsequent due dates, as also the tenor for such loans, may be shifted across the board by three months.As a result of this moratorium, individuals' EMI repayments of loans taken were not deducted from their bank accounts, providing much needed liquidity.The loan EMI payments will restart only once the moratorium time period of 3 months expires.RBI Governor Shaktikanta Das on Saturday held a meeting of held meeting with public and private sector banks where the issue of loan moratorium was also reviewed.Credit flows to different sectors of the economy, including liquidity to non-banking financial companies, microfinance institutions, housing finance companies, mutual funds, etc, and post lockdown credit flows including provision of working capital, with special focus on credit flows to MSMEs were also deliberated.The Supreme Court earlier this week directed the RBI to ensure that its March 27 guidelines directing lending institutions to allow a three-month moratorium to all borrowers is implemented in letter and spirit. DP BAL

RBI may extend moratorium on loans by another 3 months

Mumbai, May 22 () State Bank of India chairman Rajnish Kumar on Friday said close to 20 per cent of the bank's borrowers have opted for moratorium on repayment of term loans instalments. On March 27, the central bank had announced a three-month moratorium on payment of all term loans falling due between March 1, 2020 and May 31, 2020. On Friday, the Reserve Bank of India allowed banks and other lending institutions to extend the moratorium on loans by another three months -- from June 1, 2020 to August 31, 2020. "In case of State Bank of India, the percentage (of borrowers who have opted for the moratorium) is very small…around 20 per cent," Kumar told reporters through a video conference. He said not all who have opted for the moratorium are facing any liquidity issue. "Many of them could have serviced their loans but as a matter of strategy they would want to preserve their cash and have opted for the moratorium," he said. Kumar also advised borrowers to pay their loans if they are not facing any funding challenge. "If people are able to pay (EMIs) they should pay. If they are unable to pay then only they should take the benefit of the moratorium," he said. According to Kumar, the RBI's moratorium will take care of the cashflow disruption of borrowers and there might not be any urgent need for a dispensation of one-time restructuring of stressed accounts from the RBI. "Right now, the moratorium will take care of the situation around the cash flow disruptions. I would not be obsessed with one-time restructuring at this particular point of time when we have time till August 31," he said. He, however, said banks can go for debt recast even today as per June 7 circular of the RBI. Banks and NBFCs have been requesting the RBI to allow them for one-time restructuring of their accounts where the borrowers are facing funding issues. HV MKJ

About 20% SBI borrowers opt for loan repayment moratorium: Chairman

(Eds: Replacing word 'opt' with 'avail' throughout) Mumbai, May 22 () State Bank of India chairman Rajnish Kumar on Friday said close to 20 per cent of the bank's borrowers have availed moratorium on repayment of term loans instalments. On March 27, the central bank had announced a three-month moratorium on payment of all term loans falling due between March 1, 2020 and May 31, 2020. On Friday, the Reserve Bank of India allowed banks and other lending institutions to extend the moratorium on loans by another three months -- from June 1, 2020 to August 31, 2020. "In case of State Bank of India, the percentage (of borrowers who have availed the moratorium) is very small…around 20 per cent," Kumar told reporters through a video conference. He said not all who have availed the moratorium are facing any liquidity issue. "Many of them could have serviced their loans but as a matter of strategy they would want to preserve their cash and have opted for the moratorium," he said. Kumar also advised borrowers to pay their loans if they are not facing any funding challenge. "If people are able to pay (EMIs) they should pay. If they are unable to pay then only they should take the benefit of the moratorium," he said. According to Kumar, the RBI's moratorium will take care of the cashflow disruption of borrowers and there might not be any urgent need for a dispensation of one-time restructuring of stressed accounts from the RBI. "Right now, the moratorium will take care of the situation around the cash flow disruptions. I would not be obsessed with one-time restructuring at this particular point of time when we have time till August 31," he said. He, however, said banks can go for debt recast even today as per June 7 circular of the RBI. Banks and NBFCs have been requesting the RBI to allow them for one-time restructuring of their accounts where the borrowers are facing funding issues. HV MKJ MKJ

About 20% SBI borrowers avail loan repayment moratorium: Chairman

<ul><li><keyword id="6368751" type="UNKNOWN" weightage="20" keywordseo="banks">Banks</keyword> are evaluating their loan portfolio with regard to customers who availed moratorium of interest repayment during the first instalment period of March 1 to May 31.</li><li>Fresh extension on moratorium will be offered only to certain clients with good track record and healthy business operations, source told IANS.</li><li>As part of COVID-19 relief package, the <keyword id="30067" type="ORGANIZATION" weightage="20" keywordseo="RBI">RBI</keyword> on Friday extended the moratorium on term loans and interest on working capital loans by three months till August 31. </li></ul>Banks may not extend <keyword id="9275958" type="UNKNOWN" weightage="20" keywordseo="Second-moratorium">second moratorium</keyword> to all their customers amid gradual resumption in business activity and rising asset quality risk emerging from longer duration loan forbearance. Sources said that banks are evaluating their loan portfolio with regard to customers who availed moratorium of interest repayment during the first instalment period of March 1 to May 31. Fresh extension on moratorium will be offered only to certain clients with good track record and healthy business operations. "Unlike the first round, banks will now be extending the moratorium selectively (1m-3m) basis to new/old customers, while good customers too will be reluctant, given the higher interest cost and some pick-up in business activity," said Emkay Global in a report prepared after talking to several bankers on the fresh announcements by the Reserve Bank of India (RBI). As part of COVID-19 relief package, the RBI on Friday extended the moratorium on term loans and interest on working capital loans by three months till August 31. Also, as a relief for working capital borrowers, it allowed conversion of accumulated interest on these loans to Funded-Interest Term Loan (as typically happens under restructuring) instead of one-shot payment at the end of the moratorium, but still payable before March 31, 2021. Bankers are indicating that instead of the 3 month moratorium, forbearance on asset classification or selective restructuring (mainly for SME) would have been a better solution, with business activities resuming gradually. Longer moratoriums are acceptable for long-tenure loans like mortgage, but not for short-tenure loans, and also disrupts credit discipline even for relatively good customers in the long run, the brokerage said in its report on the basis of comments from bankers. It is now expected that that salaried class, which was relatively reluctant in the first round, may opt for a moratorium in the second round due to rising job losses/pay cuts. Moratorium behaviour from corporates was mixed in the first round, with even good rated corporates availing moratorium, but may not take the extension. Collection from micro finance segment borrowers still remains slow due to restriction in conducting centre meetings and thus, banks may selectively extend a short moratorium on need basis in specific areas, the brokerage said.

Banks could extend RBI's second moratorium 'selectively'

Mumbai, May 22 () Reserve Bank Governor Shaktikanta Das on Friday extended the moratorium on payment of loans by another three months till August to provide much-needed relief to borrowers whose income has been hit due to the coronavirus crisis. In March, the central bank had allowed a three-month moratorium on payment of all term loans due between March 1, 2020, and May 31, 2020. Accordingly, the repayment schedule and all subsequent due dates, as also the tenor for such loans, were shifted across the board by three months. As a result of this moratorium, individuals' EMI repayments of loans taken were not deducted from their bank accounts, providing much-needed liquidity. The EMI payments will restart only once the moratorium time period expires on August 31. DP ANZ MR MR

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RBI may extend moratorium on loans by another 3 months

PTI

About 20% SBI borrowers opt for loan repayment moratorium: Chairman

PTI

About 20% SBI borrowers avail loan repayment moratorium: Chairman

PTI

Banks could extend RBI's second moratorium 'selectively'

IANS

RBI extends moratorium on loans for another 3 months till Aug

PTI

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