All rights reserved. Why follow tips? The Centre and RBI on Tuesday told the Supreme Court that the moratorium period on repayment of loans amid the COVID-19 pandemic is “extendable” by two years. The RBI had announced a moratorium on repayment of debt for six months beginning March 1, 2020 to help businesses and individuals tide over the financial problems on account of disruption in normal business activities. Loan moratorium period can be extended by two years: Centre tells Supreme Court New Delhi: The Centre and Reserve Bank of India (RBI) on Tuesday told the Supreme Court that the moratorium period on repayment of loans amid the COVID-19 pandemic is “extendable” by two years. RBI extends loan moratorium by 3 months The Reserve Bank of India has extended the loan moratorium by another three months in light of the extended state of lockdown in the country. The RBI will use all its instruments and fashion new ones to meet Covid-related challenges, RBI governor Shaktikanta Das reiterated. All rights reserved. Loan moratorium period extendable by 2 years: Centre tells SC SNS Web | New Delhi | The report cited its source as saying that it was only a temporary reprieve to borrowers affected by the pandemic. For instance, the Hotel Association of India (HAI) has said the pandemic has destroyed more than 90 per cent of demand in the tourism and hospitality sectors, which employ nearly 45 million people. Written by Sunny Verma, Edited by Explained Desk | New Delhi | Published: May 31, 2020 6:43:31 pm The impact of availing loan extension varies widely across … The source further said that a longer moratorium period exceeding six months can impact credit behaviour of borrowers and increase the risks of delinquencies post resumption of scheduled payments. The Reserve Bank of India's loan moratorium scheme comes to an end on Monday, and banks are keeping a close watch on their loan books and … © 2009-2020 Independent News Service. Explained: What RBI’s extension of loan moratorium means According to data provided by different banks, nearly 30 per cent of their outstanding loans have come under moratorium so far.

The Reserve Bank of India has extended the loan moratorium by another three months in light of the extended state of lockdown in the country. The extension was announced by RBI governor Shaktikanta Das on Friday. Yes I strongly recommend for extension of Moratorium as there nothing has much more changed the worse conditions of middle and lower middle class, it will take time.They(Govt.) For some banks, this figure is almost 70 per cent. The RBI Governor also announced the slashing of repo rate by 40bps. Later, the bank extended the moratorium period by another three months till August 31.The report cited its source as saying that it was only a temporary reprieve to borrowers affected by the pandemic.The source further said that a longer moratorium period exceeding six months can impact credit behaviour of borrowers and increase the risks of delinquencies post resumption of scheduled payments.It is worth mentioning that banks like HDFC and Kotak Mahindra Bank had requested RBI Governor Shaktikanta Das not to extend the moratorium as many are taking undue advantage of the facility.As the various containment measures put in place by the government begin to ease and the economic activity gathers pace, continuation of temporary measures would not be sufficient in addressing cashflow problems of the borrowers. The RBI had extended the moratorium period for three months till August 31. That came a day after a moratorium - … The six-month moratorium period comes to … If interest waiver is not given, most borrowers would be declared defaulters after August 31, he said.

A more durable solution was, therefore, needed to rebalance the debt burden of viable borrowers, both businesses as well as individuals, relative to their cashflow generation abilities under the post-lockdown scenario, the sources said.What that objective into consideration, the RBI recently announced a special resolution window for COVID-19-related stress within the existing Prudential Framework for Resolution of Stressed Assets.It strikes a balance between protecting the interest of depositors and maintaining financial stability on one hand and preserving the economic value of viable businesses by providing durable relief to businesses as well as individuals affected by the COVID-19 pandemic on the other, the sources said.The resolution plans to be implemented under the framework may include conversion of any interest accrued, or to be accrued, into another credit facility, or granting of moratorium and/ or rescheduling of repayments, based on an assessment of income streams of the borrower, up to two years, the sources added.While the resolution under this framework can be invoked till December 31, 2020, the lending institutions have been encouraged to strive for early invocation in eligible cases, particularly for personal loans.Thus, the concerns of borrowers are sought to be addressed by the resolution framework wherein moratorium is also a relief option which the borrower can avail.According to the sources, reliefs for each borrower can be tailored by banks to meet the specific problem being faced by the borrower depending on the need rather than have a broad-brush approach in dealing with the issue.Recently, the RBI Governor said that while the moratorium on loans was a temporary solution in the context of the lockdown, the resolution framework is expected to give durable relief to borrowers facing COVID-19-related stress.

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