To assist the borrowers who are affected by the COVID-19 pandemic, the finance ministry has written to the Reserve Bank of India asking it to consider taking emergency measures.
The Financial Services Secretary Debashish Panda has written to the RBI suggesting a series of emergency measures including a moratorium of a few months on the payment of equated monthly instalments (EMIs), interest and loan repayments and relaxation in the classification of non-performing assets (NPAs), said an ET report.
The letter further marked the need for relief measures as businesses and people face a loss of income owing to the nationwide lockdown to counter the pandemic.
Meanwhile, as per the central bank’s rule, any default in loan payments has to be recognised within 30 days and these accounts are required to be classified as special mention accounts, the report added.
Entrackr could not independently verify the development as queries to Panda did not elicit any response till the publication of the report. We will update the report as and when he responds.
However, Finance Minister Nirmala Sitharaman in a press conference today clarified that the issues related to SMEs and loan repayments will be addressed later.
“At this moment we are reaching out poorest of poor including old age people, farmers, widow and handicapped so that they don’t starve for food amid corona pandemic. We will think about the other things,” the FM said.
Industry body Confederation of Indian Industry or CII had also recommended a series of monetary policy measures for the RBI ensure enough liquidity in the system.
It had sought a stimulus of about 1% of the GDP or Rs 2 lakh crore, has sought a three-month moratorium on all loans and change in the definition of NPA (non-performing assets) recognition from 90 days to 180 days till September 30.
At the press conference, Sitharaman announced a slew of measures aimed at providing immediate relief led by a Rs 1.7 Lakh crore economic package.
In the decisions announced were direct cash transfers to the poor and the migrant workers and a Rs 50 lakh individual medical insurance cover for all medical responders helping in the fight.