On Friday, Reserve Bank of India allowed banks and other lending institutions to extend the moratorium on loans for another three months – from June 1, 2020 to August 31, 2020.
“In the case of the State Bank of India, the percentage (of borrowers who have chosen the moratorium) is very small, about 20 percent,” Kumar told reporters via a video conference.
He said not everyone who has chosen the moratorium faces any liquidity issue.
“Many of them could have paid off their loans, but as a matter of strategy, they wanted to keep theirs cash and have chosen the moratorium, ”he said.
Kumar also advised borrowers to pay off their loans if they did not face any financing challenge.
“If people are able to pay (EMI), they have to pay. If they are unable to pay, they should only benefit from the moratorium,” he said.
“Right now, the moratorium will take care of the situation around cash flow disruptions. I would not be obsessed with one-off restructuring at this particular time when we have time for August 31,” he said.
However, he said that banks can go for debt restructuring, even today June 7th Circular from RBI.
Banks and NBFC have requested RBI to allow them a one-time restructuring of their accounts, with borrowers facing funding problems.
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