The RBI had in March granted a three-month moratorium on term loans to help borrowers during the COVID-19 outbreak, which was later extended till the end of August.
Less than 30 percent of borrowers have opted for the loan moratorium that banks had been allowed to extend to customers to ease financial pressures during the COVID-19 crisis.
Banks are trying to ensure that borrowers' financial situation and internal rating doesn't worsen and impact their ability to secure loans in the future, The Economic Times reported.
Moneycontrol could not independently verify the story.
The Reserve Bank of India had in March granted a three-month moratorium on term loans to help borrowers during the COVID-19 outbreak, which was later extended till the end of August.
However, financial experts have been advising borrowers against availing the facility due to the likely inflated payouts once the moratorium ends.
Banks are more being more careful while evaluating depositors' cash flows during the second phase of the moratorium (June-August), The Economic Times reported.
"We are taking a detailed assessment of the customers opting for Moratorium II. We are now going for the opt-in strategy, and assessing cash reserves of the borrowers before extending the relief" an official at a private bank told the publication."We are also being careful with those customers seeking top-up loans and have also availed of the moratorium," the official added.
Indiabulls Housing Finance told the paper that the share of customers opting for the moratorium has lowered to 20 percent at the end of June from 35 percent earlier.
"Customers are being educated on the economics of the moratorium and the proportion of customers opting for a moratorium has declined from the peak of 35 percent," said Indiabulls Housing Finance deputy managing director Ashwini Hooda told the paper.
Bajaj Finance saw loans under moratorium decline from 27 percent at the end of April to 15.5 percent on June 30, the report said.