The Reserve Bank of India (RBI), the country’s central bank, is mulling to offer a one-time restructuring of loans to ease the pain for pandemic-hit lenders and borrowers.
The central bank is most likely take the final call regarding this move in August or September, Financial Express has reported.
“A decision will be taken only after the first quarter results of banks are out so that both the government and the regulator have a sense of the quantum of stressed loans and the magnitude of the crisis,: the publication quoted an undisclosed source as saying.
“By that time, authorities will also be able to better gauge the state of demand in the economy.”
In addition to one-time restructuring of loans, RBI is also looking to offer other relief measures in consultations with the government, the report added.
The central bank will decide on the scope of the relief measures – whether it can be granted to all the entities or only in select high-impacted sectors.
RBI will also look to avoid fresh and unprecedented bad loans while granting the reliefs, FE said.
RBI already extended a repayment moratorium to borrowers for six months until August.
Additionally, several bankers, as well as borrowers are seeking loans after lockdown-related curbs have been lifted – in order to resume manufacturing.
In a conference, the country’s Finance minister Nirmala Sitharaman said: “An intense engagement is on with the RBI to come up with such one-time restructuring scheme. There is a lot of stress now.”