Parul
As per news reports, the retail borrowers and micro, small and medium enterprises (MSMEs) who are under financial crunch and are unable to repay their loans even after availing the 6-month moratorium provided by the Reserve Bank of India are likely to get another six-month moratorium only for principal repayments.
In fact, banks and NBFCs as part of the one-time restructuring of loans that the central bank recently allowed, are also likely to give six-month moratorium on principal repayments for retail and MSME borrowers, the Economic Times mentioned in a report citing unnamed sources having knowledge of the matter.
According to reports, as a part of the restructuring, customers willing to revamp their loans may be required to make regular interest payments. While the tenor for principal repayment will be extended, depending upon repayment ability of the borrower.
As per India Ratings, at least Rs 2.1 lakh crore (1.9% of banking credit) of retail loans could become nonperforming assets (NPAs) and may undergo restructuring. On an overall basis, about Rs 8.4 lakh crore of total bank credit could be restructured.
Banks in general expect nearly 5-7% of systemic loans to be restructured, while some private ones may adopt an aggressive NPA-recognition policy instead of restructuring debt, which will keep provisions elevated, say experts.
