The COVID-19 outbreak has made it difficult for businesses and individuals to repay their loans due to potential loss of income.
The finance ministry has suggested the Reserve Bank of India (RBI) to implement emergency measures to help the borrowers who are affected by the coronavirus lockdown, according to a report by The Economic Times.
Debashish Panda, the department of financial services secretary, wrote to the RBI on March 24, sources told the publication.
The novel coronavirus outbreak has made it difficult for businesses and individuals to repay their loans due to potential loss of income.
Moneycontrol could not independently verify the story.
According to the ET report, some of the measures recommended were:
- a moratorium of a few months on the payment of equated monthly installments (EMIs), interest and loan repayments
- relaxation in the classification of non-performing assets (NPAs).
The letter also highlighted the importance of maintaining liquidity in the system, the report added.
According to the central bank's norms, a default in loan repayment has to be recognised within 30 days, and the accounts are required to be classified as special mention accounts.On March 24, Finance minister Nirmala Sitharaman raised the threshold for insolvency filings for micro, small and medium enterprises (MSMEs) to Rs 1 crore from Rs 1 lakh.
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