With nationwide lockdown extended for 2 weeks, 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 the moratorium and the RBI is actively considering them, according to sources. 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 these circumstances at the end of the present moratorium period ending on May 31.
So, the extension of moratorium by another three months would be a practical approach from the regulator, It will help both borrowers and banks in these difficult times, the official said.
The Reserve Bank of India had on March 27 allowed banks and financial institutions to offer a moratorium of three months on payment of installments of all term loans outstanding as on March 1 to help mitigate the hardship faced by borrowers.