Moneycontrol PRO
Check Credit Score
Check Credit Score
HomeNewsBusiness

RBI may extend loan moratorium period for stressed sectors: Report

Sectors such as hospitality, automobiles and aviation might get a breather on loan repayments for a few more months

July 23, 2020 / 01:01 PM IST

The Reserve Bank of India (RBI) may allow banks to extend the moratorium on loan EMIs beyond the August 31 deadline, considering the prolonged impact on companies due to the coronavirus pandemic.

Companies, particularly in stressed sectors such as hospitality, automobiles and aviation, might be given a breather, sources told Mint. The central bank has started impact assessment – including gathering data on repayment and cash flows of borrowers during the lockdown, to gain “better understanding of the challenges faced by borrowers,” they added.

Moneycontrol could not independently verify the report.

One of the sources said while the moratorium extension for certain segments beyond August is a “foregone conclusion” as the RBI expects some sectors to continue requiring support from lingering economic pains, the “fine print is still a work in progress.”

Follow our LIVE Updates on the coronavirus pandemic here

COVID-19 Vaccine

Frequently Asked Questions

View more
How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

View more
Show

India went under a country-wide lockdown from March 25, which was lifted in phases from June 1 and businesses were forced to shut shop completely during the period. Many states and some regions still continue to be under lockdown due to growing number of COVID-19 cases.

A second source said certain sectors like automobile and hospitality could see moratorium period extended, but the same is “unlikely to be extended to individual borrowers.”

RBI did not respond to queries regarding the same, the paper said.

Documents and disclosures have shown as much as 29 percent bank loans and 59 percent non-banking finance company (NBFC) loans are under a moratorium for the period April-June. This is over 30 percent of all loans amounting to Rs 28.3 lakh crore, as per the report.

The amount under moratorium could drop to Rs 16.22 lakh crore by Q1FY21 once the economy gets back on its feet, it added.

Follow our full COVID-19 coverage here

Moneycontrol News
first published: Jul 23, 2020 01:01 pm

Discover the latest business news, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!

Advisory Alert: It has come to our attention that certain individuals are representing themselves as affiliates of Moneycontrol and soliciting funds on the false promise of assured returns on their investments. We wish to reiterate that Moneycontrol does not solicit funds from investors and neither does it promise any assured returns. In case you are approached by anyone making such claims, please write to us at grievanceofficer@nw18.com or call on 02268882347