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RBI restructuring package: Industry divided on regulator's new scheme

While some experts opined it would aid the tourism industry in overcoming COVID-19 pandemic's impact, others outlined the scheme's guidelines as "restrictive" to the NBFCs

twitter-logoBusinessToday.In | August 29, 2020 | Updated 17:38 IST
RBI restructuring package: Industry divided on regulator's new scheme
The restructuring package was announced by Reserve Bank of India (RBI) on August 6

The recently announced loan restructuring package by the Reserve Bank of India (RBI) has elicited mixed reactions from financial sector experts. While some opined it would aid the tourism industry in overcoming COVID-19 pandemic's impact, others outlined the scheme's guidelines as "restrictive" to the NBFCs (Non-Banking Financial Companies).

Anirban Chakraborty, MD, and CEO of Tourism Finance Corporation of India told PTI that the hotels and hospitality sector in the country fall under the MSME segment as per the recent loan restructuring scheme of the RBI.

He further added that the emergency credit line, which has been extended to borrowers, is a good measure to help sustain the sector for the next two years. Chakraborty was speaking at a webinar organised by Enqube Collaborations on August 28.

Also Read: Banks expected to restructure loans up to Rs 8.4 lakh crore after RBI decision: IndRa

Chakraborty said 70 per cent of TFCI's portfolio is with the MSME sector and this credit line with the government guarantee will help the industry.

According to him, tourism and hospitality, one of the worst-hit sectors due to the COVID-19 pandemic, is expected to bounce back in the third or fourth quarter of the current fiscal year.

Srei Infrastructure Finance vice chairman Sunil Kanoria told the news agency that the RBI restructuring package is somewhat "restrictive and not a workable solution."

"I have a contrarian view of the RBI guidelines. These are restrictive and not workable. The guidelines should have been left to the lenders and borrowers, which would have been better," he said.

Regarding the NBFCs, Kanoria said the sector is deprived of availing of the moratorium on repayments of loans taken from the banks.

Also Read: Govt operationalises Rs 20,000 crore stress fund for MSMEs; issues guidelines to avail loan from banks

"Although we are extending the moratorium to our customers, we are not getting the same benefit from banks so there is a mismatch on the liability side," he added.

Union Bank of India Executive Director B Mishra said that COVID-19 has led to behavioural changes on the part of the government, regulator, bankers, and borrowers.

(With PTI inputs)

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