Echoing the views of HDFC Ltd Chairman Deepak Parekh, SBI Chairman Rajnish Kumar has said the loan moratorium should not extended beyond August. "Most bankers, including myself believe that there is no need for a moratorium beyond August 31. We are confident that six months is long enough for allowing non-repayment," he said.
Deepak Parekh, during a meeting with the Reserve Bank of India Governor Shaktikanta Das via video-conferencing this week, had said that some were exploiting the moratorium and that it should not be extended as it'll hurt smaller shadow banks in the country.
"Please do not extend the moratorium. We see that even people who have ability to pay whether corporate or individuals are taking advantage under this and deferring payment. We hear that there is some talk of extending the moratorium. It's going to hurt and hurt smaller NBFCs," he said. Notably, many NBFCs have offered moratorium to their customers, but they don't receive the same support from banks from whom they have borrowed.
The RBI Governor, however, refused to make any commitment on Parekh's request. "I have noted the suggestion. I won't be able to make a comment now," he had said. The RBI in May extended the moratorium on payment of all term loans by another three months till August 31 to help borrowers. The decision followed after the central bank allowed a three-month moratorium on payment of all term loans due between March 1 and May 31.
Currently, the banking industry's Rs 40 lakh crore book is under moratorium, which includes both retail and term loans to corporate sector. There is a likelihood of NPAs coming from the moratorium book.
The finance ministry has started consulting with various industry leaders and the banks about the necessity of extending the loan moratorium beyond August, when the second three-month long respite ends. The government reportedly wants to continue the moratorium for companies in most affected sectors such as automobile, steel, hospitality and real estate for another three months until November.
Meanwhile, State Bank of India today reported an 81 per cent rise in standalone net profit at Rs 4,189.3 crore in April-June quarter of fiscal 2020-21 as against Rs 2,312.20 crore in the corresponding period last year. The public sector lender reported a one-time gain of Rs 1,539.7 crore in the quarter under review, the PSB said in an exchange filing.