Log in
E-mail
Password
Show password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON
News: Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 
All NewsEconomyCurrencies & ForexEconomic EventsCryptocurrenciesCybersecurityPress Releases

Government in talks with RBI on loan restructuring: Sitharaman

07/31/2020 | 01:33pm EDT
India's Finance Minister Nirmala Sitharaman attends a joint news conference with U.S. Treasury Secretary Steven Mnuchin in New Delhi

The Indian government is working with the central bank on a possible one-time restructuring of loans due to the impact of the COVID-19 pandemic on businesses, finance minister Nirmala Sitharaman said on Friday.

"The focus is on restructuring. The finance ministry is actively engaged with the RBI (Reserve Bank of India) on this. In principle, the idea that there may be a restructuring required, is well accepted," Sitharaman said.

The RBI allowed banks and financial institutions to offer six-month moratoriums on principal and interest payments, until August 31, to all individuals and corporates holding term loans.

However, several bankers have highlighted the stress this is creating on bank balance sheets.

Earlier this week, HDFC Bank chairman Deepak Parekh in an exchange with the RBI governor said the moratorium was being partly misused and should not be continued as it would hurt banks, and particularly smaller non-bank finance companies or shadow banks.

Parekh instead asked Governor Shaktikanta Das to consider a one-time restructuring scheme instead.

The RBI's financial stability report released last week showed that at the headline level, 50% of total outstanding loans were under moratorium of as April.

The report also said bad loans could soar to almost 15% of total loans by March 2021 in a worst case scenario, compared with 8.5% in March this year.

The RBI governor, in response to Parekh's comments, said the central bank had not taken a decision on whether to extend the loan moratorium beyond August 31.

Sitharaman, who was addressing the National Executive Committee Meeting of the Federation of Indian Chambers of Commerce and Industry, also assured small companies covered by an emergency credit facility that they cannot be refused credit by banks. She added that the government would look into any such refusals.

She said that the finance ministry was also working with the RBI on an extension of the moratorium or restructuring of loans for the hospitality sector

"I fully understand the requirements of the hospitality sector. We are working with RBI on this," she said.

By Swati Bhat


ę Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
BANK OF INDIA LIMITED 0.33% 61.1 End-of-day quote.25.59%
GLAXOSMITHKLINE PHARMACEUTICALS LIMITED -0.80% 1453.35 End-of-day quote.-10.46%
HDFC ASSET MANAGEMENT COMPANY LIMITED -1.18% 2736.15 Delayed Quote.-5.12%
HDFC LIFE INSURANCE COMPANY LIMITED -1.08% 683.2 End-of-day quote.1.02%
HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED -0.22% 2896.25 End-of-day quote.13.20%
SIEMENS LTD 0.57% 2169.95 Delayed Quote.36.94%
Latest news "Economy & Forex"
06:00aBiden to announce up to $102 mln in funding for U.S.-ASEAN partnership
RE
06:00aBiden to participate in virtual east asian summit on wednesday after taking part in u.s.-asean-summit on tuesday-senior u.s. official
RE
06:00aGREENWASHING : deception and vague promises that do not help the environment
RE
06:00aBiden to join U.S.-ASEAN summit Trump skipped after 2017
RE
06:00aU.s. president biden to announce plans to provide $102 million to expand u.s.-asean strategic partnership at virtual summit on tuesday-white house
RE
05:59aChina regulators meet some companies in key sectors for their foreign debt holding - state planner
RE
05:56aWestern Cape exports R78,68 billion worth of combined agricultural and agri-processing products
PU
05:53aSudan foreign minister says pm hamdok and his missing cabinet members still held in unknown location - information ministry
RE
05:52aJapan's Nidec raises profit outlook on strong auto, home appliance demand
RE
05:47aExclusive-Germany cuts 2021 GDP growth forecast, lifts 2022 estimate - sources
RE
Latest news "Economy & Forex"