Punjab National Bank extends moratorium to NBFC

Kolkata: Punjab National Bank is one of the first lenders to blink in extending moratorium to non-banking finance companies (NBFC) after Reserve Bank of India cleared doubts over the issue on Saturday.
The second largest state-owned lender has communicated to its NBFCs clients about the same this week.

"We have sent mails to all NBFCs for expressing their desire to avail moratorium. We are taking a call based on that," a senior executive at PNB told ET.

Banks were earlier divided over the issue. While some started offering it from early April, State Bank of India and several others were against it.

SBI has convened a board meeting today to review it, according to reports. It was earlier against extending moratorium on loan payments to non-bank lenders.

ET was first to highlight that banks would review their earlier decision after RBI nudged them to do so.

RBI on Saturday had conveyed to top banks that even NBFCs including microfinance firms and housing finance companies are covered under `borrowers' to be eligible for moratorium. The central bank also told them they could use their discretion to decide the eligibility of firms based on their credit and liquidity profile.

About 12 public sector banks and 10 private sector banks had not extended moratorium on payment to microfinance institutions till Monday, according to Sa-Dhan, an industry organisation for MFIs.