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Coronavirus outbreak: SBI to extend moratorium benefits to NBFCs

Coronavirus outbreak: SBI to extend moratorium benefits to NBFCs

On March 27, RBI permitted lenders to give a three-month moratorium for all borrowers to reduce their problems amid the ongoing coronavirus crisis

India is under lockdown since March 25 India is under lockdown since March 25

State Bank of India (SBI) has reportedly decided to extend the Reserve Bank of India (RBI) granted moratorium on loans to non-banking finance companies (NBFCs). However, it would be done on a case-to-case basis, the reports also said. The SBI board, in its weekly meeting on Wednesday, decided that a moratorium on interest payment for three months beginning March 1 will also be offered to the NBFCs with cash shortage.

Earlier, Punjab National Bank (PNB) agreed to extend moratorium to NBFCs. Most banks, including SBI were earlier against offering moratorium to NBFCs.

On March 27, RBI permitted lenders to give a three-month moratorium for all borrowers to reduce their problems amid the ongoing coronavirus crisis. "All commercial banks (including regional rural banks, small finance banks and local area banks), co-operative banks, all India Financial Institutions, and NBFCs (including housing finance companies and micro-finance institutions) are being permitted to allow a moratorium of three months on payment of instalments in respect of all term loans outstanding as on March 1, 2020," the RBI had said.

It also said that the repayment schedule and all subsequent due dates, as well as the tenor for such loans, may be shifted across the board by three months.

The Supreme Court recently directed the RBI to ensure that its loan moratorium guidelines directing lending institutions to allow a three-month moratorium to all borrowers is implemented in letter and spirit. Meanwhile, RBI Governor Shaktikanta Das on Saturday held a meeting with public and private sector banks where the issue of loan moratorium was also reviewed.

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