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Last Updated : Jun 03, 2020 09:17 PM IST | Source: PTI

Retailers received ‘little support' from banks to tide over COVID crisis: RAI Survey

The survey, which took response from 311 retailers across India said 56 percent had outstanding term loan facilities and 52 percent did not get moratorium announced by the RBI on March 27.

PTI

Over 300 retailers received little or no financial support from banks to recover from the impact of the COVID-19 crisis when they needed it, according to a survey by Retailers Association of India (RAI).

As per the Bank Benefits Survey by RAI "PSU banks have been comparatively more helpful than private banks" towards retailers.

The survey, which took response from 311 retailers across India said 56 percent had outstanding term loan facilities and 52 percent did not get moratorium announced by the RBI on March 27.

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It further said 65 percent of respondents already had a working capital loan and 54 percent asked for additional working capital limit (COVID limit) from respective banks. However, only 15 percent of retailers were provided with additional working capital loans as mandated by the RBI.

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While around 52 percent of respondents are satisfied with the financial support and services extended by PSU banks during COVID-19, almost an equal percentage are dissatisfied with private banks, the RAI survey added.

"Private banks have been much more reluctant than PSU banks to extend additional working capital loans to retailers despite directions issued by the Reserve Bank of India (RBI) and the government of India," RAI said.

Commenting on the findings, RAI CEO Kumar Rajagopalan said retailers selling both essential and non-essential items have reported a 40 percent and 100 percent drop in sales, respectively, due to the COVID-19 situation.

The closure of business over the past couple of months has resulted in the loss of revenue, which has rendered some of the retailers unable to pay salaries to their staff, he added.

"The reluctance of banks, especially private banks, to come to their aid is unfortunate and could hurt not only retailers but the banks themselves. Banks have made huge investments in the retail sector, and if the sector struggles to get back on its feet, a significant portion of that investment could turn into non-performing assets," Rajagopalan said.

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First Published on Jun 3, 2020 09:05 pm
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