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SBI to extend moratorium to NBFCs

SBI to extend moratorium to NBFCs
Business1 min read
Kolkata, May 7 () The country's largest lender SBIhas decided to extend the RBI-approved moratorium to thecash-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 toborrowers of term loans of all kinds for three months --March, April and May.

"SBI has taken a decision to extend the moratoriumallowed by RBI to the NBFC sector which is facing severeproblem of cashflow," Khara said.

The bank would extend the moratorium to the Non-Banking Financial Companies (NBFCs) on a case-to-case basisafter assessing their cash budgets and examining the need forextending it, he told .

"Just to ensure that there is no gap in the cashflowand help them tide over the contingency, SBI has taken such adecision," Khara said.

Earlier, the State Bank of India extended 10 per centemergency COVID response contingency loan to all kinds ofborrowers to an extent of Rs 200 crore each, he said.

Reserve Bank Governor Shaktikanta Das on Mondayreviewed liquidity position and ways to promote lending to theMSME sector during a meeting with representatives of NBFCs andmutual funds amid the lockdown induced by the COVID-19pandemic.

Operations of NBFCs have commenced from Monday as thegovernment eased restrictions for the lockdown.

Some of the issues discussed during the meetingincluded availability of liquidity from banks and otherfinancial institutions and post-lockdown strategies for supplyof credit, including working capital, to MSMEs, traders andbottom of pyramid customers in semi-urban, rural and urbanareas, the RBI said.

Implementation of three months moratorium on repaymentof loan instalments announced by the RBI, and strengtheninggrievance redressal mechanisms were also discussed.

The governor acknowledged the critical role of NBFCs,including micro finance institutions (MFIs), in deliveringlast mile credit, and the importance of mutual funds infinancial intermediation, RBI said in the statement.

The RBI governor on Saturday had met heads of publicsector and private sector banks asking them to step up theirlending towards the MSME sector. dc SOM BJSOM SOM