SBI To Extend Moratorium To Shadow Banks To Deal With Cash Flow Problem
SBI has decided ti extend moratorium to non-banking financial companies
The country's largest lender SBI has decided to extend the RBI-approved moratorium to the cash-strapped NBFC sector to help them tide over the crisis, its MD Dinesh Kumar Khara said on Thursday.
The RBI has allowed banks to extend moratorium to borrowers of term loans of all kinds for three months -- March, April and May.
"SBI has taken a decision to extend the moratorium allowed by RBI to the NBFC sector which is facing severe problem of cashflow," Khara said.
The bank would extend the moratorium to the Non- Banking Financial Companies (NBFCs) on a case-to-case basis after assessing their cash budgets and examining the need for extending it, he told PTI.
"Just to ensure that there is no gap in the cashflow and help them tide over the contingency, SBI has taken such a decision," Khara said.
Earlier, the State Bank of India extended 10 per cent emergency COVID response contingency loan to all kinds of borrowers to an extent of Rs 200 crore each, he said.
Reserve Bank Governor Shaktikanta Das on Monday reviewed liquidity position and ways to promote lending to the MSME sector during a meeting with representatives of NBFCs and mutual funds amid the lockdown induced by the COVID-19 pandemic.
Operations of NBFCs have commenced from Monday as the government eased restrictions for the lockdown. Some of the issues discussed during the meeting included availability of liquidity from banks and other financial institutions and post-lockdown strategies for supply of credit, including working capital, to MSMEs, traders and bottom of pyramid customers in semi-urban, rural and urban areas, the RBI said.
Implementation of three months moratorium on repayment of loan instalments announced by the RBI, and strengthening grievance redressal mechanisms were also discussed. The governor acknowledged the critical role of NBFCs, including micro finance institutions (MFIs), in delivering last mile credit, and the importance of mutual funds in financial intermediation, RBI said in the statement.
The RBI governor on Saturday had met heads of public sector and private sector banks asking them to step up their lending towards the MSME sector.
(This story has not been edited by staff and is auto-generated from a syndicated feed.)