Paying EMIs of home loans, car loans or credit card bills? Important development for you

If you are among those paying EMIs of home loans, car loans or any other borrowing or credit card bills, then this is an important development for you! Indian Banks' Association (IBA) has submitted a list of recommendations to both the Modi government and the Reserve Bank of India (RBI) to ease the financial burden faced by various sectors due to the outbreak of coronavirus pandemic. IBA has requested RBI to double moratorium period to 6 months and provide credit guarantee for MSME loans.

Some of the key recommendations included blanket credit guarantee for MSME loans, one-time loan restructuring for sectors hit hard by COVID-19 and raising of moratorium and relief for the NBFC sector, as per a reprort in PTI. As per the RBI's norms, restructuring of loans is prohibited and resolution of default cases are dealt as per the Insolvency and Bankruptcy Code (IBC).

Based on the representation made by various industry associations, a detailed and comprehensive list of suggestions have been submitted to the government and the RBI for addressing problems faced by various sectors including MSME in general and banking sector in particular. It is for the regulator and the government to take an informed decision on those suggestions depending on their assessment and keeping in mind prudential norms.

Bankers believed that some safety net has to be created for both industry and banks for survival first, sources said, adding, revival would follow.

Earlier this month, SBI Chairman Rajnish Kumar had said that the IBA will request for raising the loan moratorium period from the existing three months to 5-6 months depending on the evolving situation.
Kumar, who is also the chairman of the IBA, had said that there was also demand for government guarantees against loans to certain risk-prone sectors to revive credit flow in the economy post lockdown.