RBI & Nationalise Banks Extending the Moratorium

SBI agreed with RBI to extend and offer the moratorium on loan Repayment to NBFC's & Micro-Finance, Banking Sources said

After Covid-19 Period, Lead by SBI have finally agreed to extend 3 months moratorium to troubled non-banking financial Company and micro-finance institutions. SBI and All other nationalise banks will offer the moratorium on loan repayment to NBFC's which have a running loan from them.

Nbfc and MFI's were confused to provide the moratorium even though NBFCs had extended the facility to their customers following the RBI's guidelines on loan repayments. But here's some conditions like SBI said he agreed to extend moratorium on a case-to-case basis. Other Banks have also showed their willingness to consider the moratorium, said banking sources. NBFCs also took up the loan moratorium issue with RBI officials recently.

On March 27, the central bank, in its first COVID package, had reduced the repo rate by 75 basis points (bps) to 4.40%, CRR by 100 bps to 3% and announced a 3 month moratorium on term loans to support the economy. All moratorium is applicable on unsecure loans and Credit Cards dues outstanding as on 1st march to 31st may 2020.

BTW, Banks were hesitate to extent that moratorium to NBFCs and MFIs. Banks largely ignored the Rs25,000-crore long term repo operations (TLTRO) conducted by the RBI and bid for only half of the money put by the central bank last month, indicating their unwillingness to bail out troubled NBFCs and MFIs.

There's already a complaint that banks which had taken funds from the TLTRO window offered by the RBI earlier had given that money to top-rated corporates, ignoring the claims of cash-starved small and medium units.