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Banks seek RBI's permission to restructure loans worth Rs 3 lakh crore: Report


Date: 04-06-2020
Subject: Banks seek RBI's permission to restructure loans worth Rs 3 lakh crore: Report
Banks have sought permission from the Reserve Bank of India (RBI) to restructure loans worth Rs 3 lakh crore.
The lenders want to restructure loans given to companies in the hospitality, aviation and commercial property spaces to avoid downgrading the borrowings, The Economic Times reported.

Moneycontrol could not independently verify the report.

The COVID-19 outbreak and the consequent lockdown have impacted several industries, particularly aviation, hospitality, and real estate.

Banks' exposure was Rs 2.3 lakh crore to commercial realty at the end of April, Rs 45,862 crore to the hospitality sector, and over Rs 30,000 crore to aviation companies, The Economic Times reported.

Lenders have informed the central bank that without restructuring, the amount of non-performing assets (NPAs) on their sheets will increase, the report said.

Heads of state-run banks had raised the subject during their meeting with Finance minister Nirmala Sitharaman on May 22, the report added.

"We are in talks with RBI to extend help to worst-hit sectors. We see huge slippages in aviation, hospitality and commercial realty if restructuring benefits are not extended to past loans," a banker told the publication.

Some bankers told the paper that the moratorium granted by the RBI, which has been extended till August 31, may be insufficient for these sectors, since they will take a few quarters to build cash reserves and clear payments.

“We have started extending loans from our COVID emergency lines to the companies that are the worst hit, but more than emergency loans, these sectors could be helped greatly if easier terms of repayment are given through restructuring,"the head of a state-run bank told the publication.

Source:- moneycontrol.com

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