Business Today
Loading...

COVID-19 crisis: RBI board meet concludes; no announcement on one-time loan recast

This would be the first such meet since the coronavirus outbreak. The RBI board is also expected to discuss the state of economy, and banking sector in particular

twitter-logoBusinessToday.In | June 26, 2020 | Updated 15:38 IST
COVID-19 crisis: RBI board meet concludes; no announcement on one-time loan recast
The coronavirus-induced lockdown, which began in March, has severely affected businesses in terms of cash flows and their ability to repay banks on time

Amid growing clamour to allow a one-time loan recast, the Reserve Bank of India's (RBI) central board, which met on Friday, did not make any substantial announcements.

The board meeting was chaired by RBI Governor Shaktikanta Das through video-conferencing. It was the first such meet since the coronavirus outbreak.

The board deliberated on the current economic situation and the evolving challenges posed by the COVID-19 pandemic, the RBI said in a release.

The panel also discussed the apex bank's "activities during the period (July 2019-June 2020), the budget for the next accounting year July 2021 to March 2020 (aligned with government's financial year), other policy and operational matters."

Also Read: RBI bars YES Bank from paying interest on Tier II Bonds

However, the RBI did not announce the one-time loan restructuring that has been a chorus of industry and banks alike.

The RBI has already announced several relief measures to alleviate the impact of COVID-19 pandemic. This includes a six-month moratorium the apex bank provided on loan repayments for all working capital and term loans.

However, the clamour for a one-time loan recast has been growing by the day as banks fear asset quality pressures may build up.

The need for such a move also gained urgency after the RBI said last month that India's GDP (Gross Domestic Product) would be in negative territory in FY21.

Also Read: PMC Bank case: RBI extends restrictions for 6 months; raises withdrawal limit to Rs 1 lakh 

The idea was also discussed during several meetings between the apex bank and industry representatives recently.

The recast would have let banks stitch their repayment plan by allowing more time for borrowers to pay back their loan amount.

Meanwhile, Finance Minister Nirmala Sitharaman also spoke on the matter on Thursday. She said that "an intense engagement is on with the RBI to come up with such a scheme. There is a lot of stress now."

The coronavirus-induced lockdown, which began in March, has severely affected businesses in terms of cash flows and their ability to repay banks on time.

Also Read: RBI MPC minutes: Reviving consumer, business confidence key challenge, says Shaktikanta Das

Youtube
  • Print

  • COMMENT
BT-Story-Page-B.gif
A    A   A
close