FM Sitharaman: In talks with RBI to restructure loans, extend moratorium
Parul August 1, 2020
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As per reports, Union Finance Minister Nirmala Sitharaman has said that her ministry is working with the Reserve Bank of India (RBI) on extending the loan moratorium period for the hospitality sector which has been hit hard by the pandemic.
The minister reiterated that the ministry was talking to the RBI on restructuring loans for industry.
The Hotel Association of India (HAI) has said the pandemic has destroyed more than 90 per cent of demand in the tourism and hospitality sectors, which employ nearly 45 million people. The hospitality sector wants a staggered approach to the rate of interest.
The RBI had extended the moratorium period for three months till August 31. There has been demand from the hospitality sector to extend the date.
However, the bankers are against extending the moratorium period. For instance, HDFC Chairman Deepak Parekh recently urged RBI Governor Shaktikanta Das not to do it. Parekh said many entities capable of repaying were taking advantage of the scheme and this was hurting the financial sector, especially non-banking.
The finance minister also said work on setting up a development finance institution (DFI) was on. A high-level panel has firmed up investment plans for infrastructure projects worth Rs 111 trillion in five years.
The finance minister also emphasised reciprocity in trading arrangements with countries to which India has opened up.
The finance minister also said that banks could not refuse credit to micro, small, and medium enterprises (MSMEs) covered under emergency credit facilities. Banks have sanctioned Rs 1.3 trillion to MSMEs under this scheme as of July 23. Of that, Rs 82,065 crore has been disbursed.