Categories: Business

Coronavirus Lockdown: RBI may extend moratorium on repayment of loans for three more months, says report

Mumbai: With the government extending the nationwide lockdown up to 31 May, the Reserve Bank of India (RBI) is likely to extend the moratorium on repayment of loans for three more months, according to an SBI research report.

On Sunday, the National Disaster Management Authority (NDMA), the nodal department, announced lockdown 4.0 till 31 May to check the spread of the novel coronavirus.

The lockdown was first announced by Prime Minister Narendra Modi on 24 March for 21 days in a bid to combat the COVID-19 pandemic. It was first extended till 3 May and again till 17 May.

Representational image. Reuters

In March, RBI had allowed a three-month moratorium on payment of all term loans due between 1 March, 2020 and 31 May, 2020.

“With the lockdown now extended up to 31 May, we expect RBI to extend the moratorium by three months more,” SBI’s research report- Ecowrap said.

Click here to follow LIVE updates on coronavirus outbreak

The report said the moratorium for three more months will imply that companies need not pay till 31 August, 2020, and this means that there is almost minimal possibility of companies being able to service their interest liabilities then in September.

Click here to follow LIVE news and updates on stock markets

Failing to repay the interest liabilities will mean the account might be classified as non-performing loans as per the RBI norms.

“Thus, the RBI needs to give operational flexibility to banks for a comprehensive restructuring of the existing loans and also a reclassification of 90 day norm,” the report said.

The RBI’s 7 June circular is stringent and gives little flexibility to banks.

“The revised restructuring norms should give banks to restructure like say converting interest liabilities up to March 2021 into term loans, repayable in 3-5 years for working capital and at the end of the tenor in case of term loans,” the report said.

RBI also needs to also clarify whether working capital expansions classify as COVID-19 debt, it said.

Updated Date: May 18, 2020 21:10:14 IST

Tags :

Banking,

Business India Positive,

Coronavirus,

Coronavirus Outbreak,

Coronavirus Pandemic,

COVID-19,

Loan,

Lockdown,

Moratorium,

Nationwide Lockdown,

NewsTracker,

RBI,

Reserve Bank Of India,

SBI,

SBI Research Report,

Shutdown

{n.callMethod? n.callMethod.apply(n,arguments):n.queue.push(arguments)}

; if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version='2.0'; n.queue=[];t=b.createElement(e);t.async=!0; t.src=v;s=b.getElementsByTagName(e)[0]; s.parentNode.insertBefore(t,s)}(window,document,'script', 'https://connect.facebook.net/en_US/fbevents.js'); fbq('init', '259288058299626'); fbq('track', 'PageView');

Jerry Rolon

After working for 7 years as a Internet Marketer, Jerry now aims to explore the journalistic side of Internet. With his impeccable knowledge in this domain, he churns out some of the best news articles from the internet niche. With respect to acedamics, Jerry earned a degree in business from California State University.

Recent Posts

Angry Pepe Fork Unveils Deflationary Roadmap as PI Network Crosses 60M Users

New York, USA, 1st July 2025, ZEX PR WIRE, While PI Network officially passes 60…

55 minutes ago

Tradeview Secures Prestigious SCA Category 5 License, Unlocking New Growth Opportunities in the UAE

Dubai, UAE, 1st July 2025, ZEX PR WIRE, In a bold step forward for its…

5 hours ago

NodeOps Network $NODE Token Generation Event Sells Out in Minutes via Binance Wallet, Debuts Across Top Global Exchanges

Dubai, UAE, 30th June 2025, ZEX PR WIRE, NodeOps Network is thrilled to announce the…

13 hours ago

LF Labs (LF Coin) Breakout Steals Spotlight as Shiba Inu Price Targets $0.000017 Return

Dubai, UAE, 30th June 2025, ZEX PR WIRE, LF Labs (LF Coin) gained momentum today…

13 hours ago

How Leclerc & Co. Is Redefining Affordable Luxury in the Watch Industry

In a market flooded with mass-produced designs and influencer-driven hype, a new contender is emerging…

3 days ago

Arbra Unveils Tokenized Private Equity Basket with SpaceX, Ramp, and Varda on Colb

London, UK, 27th June 2025, Arbra Partners Group (“Arbra”), the global financial services company, has…

4 days ago