RBI allowed banks and financial institutions to offer a moratorium of three months on payment of instalments of all term loans
New Delhi: With further extension of the nationwide lockdown, the RBI is considering a proposal for extending the moratorium on bank loans by another three months to help people and industry impacted by the ongoing lockdown to contain COVID-19.
Suggestions from various quarters, including from Indian Banks' Association, have come for the further extension of the moratorium and the RBI is actively considering them, according to sources.
The government on Saturday extended the lockdown for further two weeks till 17 May with certain relaxations for red, orange and green zones.
Income stream will not resume due to the continuation of nationwide lockdown, the sources said, adding that so many entities and individuals will be unable to service their debt in this circumstances at the end of the present moratorium period ending on 31 May.
So, the extension of moratorium by another three months would be a practical approach from the regulator, a senior public sector bank official said.
It will help both borrowers and banks in these difficult times, the official added.
The Reserve Bank of India (RBI) had on 27 March allowed banks and financial institutions to offer a moratorium of three months on payment of instalments of all term loans outstanding as on 1 March to help mitigate hardship faced by borrowers.