COVID-19: RBI chief asks banks to implement EMI moratorium policy

Tribune News Service

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New Delhi, May 2

RBI Governor Shaktikanta Das held two sessions of video conferencing with chiefs of major public and private sector banks on Saturday to ensure compliance with the Supreme Court’s directions on implementing the loan moratorium policy and discuss the credit needs of the industry and other banking institutions in the post-lockdown era.

The RBI chief discussed the implementation of the three-month moratorium on repayment of loan instalments, including those for credit cards, EMIs and other term loans outstanding between March 1 and May 31, 2020. Two days back the Supreme Court had asked RBI to ensure that its loan moratorium policy permitting exemption from paying EMIs and other loans is implemented by the banks.

The RBI had escaped closer scrutiny of the implementation of its March 27 exemption announcement because none of the petitioners had outstanding loans. The petitions had pointed out that interest will continue to accrue during the three-month moratorium which would case extreme hardship to people whose business and work has stopped.

A major focus of the discussions was credit flows to different sectors of the economy, including liquidity to Non-Banking Financial Companies (NBFCs), micro finance institutions, housing finance companies and mutual funds, said an official news release.

The RBI has made major efforts to encourage banks to lend by a string of credit infusion initiatives totalling Rs 2.5 lakh crore—Rs 1 lakh crore largely for PSUs and large corporations, Rs 50,000 crore for NABARD, SIDBI and NHB, a Rs 50,000 crore liquidity facility for mutual funds and Rs 50,000 crore for NBFCs.

The bankers also exchanged views on the current economic situation, the stability of the financial sector and functioning of overseas branches in view of the economic slowdown.