Restructuring on cards in absence of moratorium: HDFC Securities
Business | July 17, 2021 14:50 ISTAccordingly, HDFC Securities, expects banks to remain selective in restructuring stressed assets.
Accordingly, HDFC Securities, expects banks to remain selective in restructuring stressed assets.
The moratorium of up to two years will be available to individuals and small and medium enterprises that did not restructure their loans in 2020 and were classified as standard accounts till March 2021, RBI Governor Shaktikanta Das in an unscheduled address.
The Supreme Court has declined to interfere with decision of Centre, RBI to not extend loan moratorium period beyond August 31, 2020. The top court said that it is a policy decision.
A bench of the Apex Court, headed by Justice Ashok Bhushan fixed the matter for further hearing after a week. During the course of the hearing, Solicitor General (SG) Tushar Mehta told the Supreme Court that pre-COVID defaulters can't benefit from the fresh resolution framework.
Banks have started depositing the interest amount charged on interest on loans and credit card EMIs during the moratorium period.
In a relief to stressed borrowers who are facing hardships due to the impact of COVID-19 pandemic, the apex court had passed the interim order on September 3.
The moratorium was announced by the Reserve Bank of India in March as part of measures to mitigate economic hardships caused by the coronavirus-induced lockdown in the country.
In a notification, RBI said: "All lending institutions are advised to be guided by the provisions of the Scheme and take necessary action within the stipulated timeline."
The Centre has informed the Supreme Court that lenders have been directed to credit in the accounts of eligible borrowers by November 5 the difference between compound interest and simple interest collected on loans of up to Rs 2 crore during the RBI’s loan moratorium scheme.
Initially, the RBI on March 27 had issued the circular which allowed lending institutions to grant a moratorium on payment of instalments of term loans falling due between March 1, 2020, and May 31,2020, due to the pandemic. Later, the period of the moratorium was extended till August 31 this year.
In an affidavit before the Supreme Court, the Reserve Bank of India has said it would not be possible to grant more time as relief for sectors hit by the coronavirus pandemic.
The Supreme Court Monday asked the Centre and the RBI to place on record the KV Kamath committee recommendation on debt restructuring due to COVID-19 related stress on various sectors as also the notifications and circulars issued by them so far on the issue of loan moratorium.
The Centre has agreed to waive off compounded interest for loans up to Rs 2 crore, frozen by the Reserve Bank of India (RBI) in a six-month moratorium granted because of the coronavirus pandemic, the government has told Supreme Court in an affidavit.
The Supreme Court on Monday adjourned to October 5 hearing on two public interest litigations (PILs) seeking an extension of the moratorium period and waive off interest on the repayment of the loan amount in view the COVID-19 pandemic.
After State Bank of India (SBI), HDFC Bank has stipulated a minimum outstanding balance of Rs 25,000 to consider the credit card or loan outstanding for restructuring under the scheme approved by the Reserve Bank of India (RBI).
State Bank of India (SBI) is now offering loan moratorium to its customers for upto 2 years under its loan restructuring scheme. The bank has also launched a facility on its website to help retail customers check their eligibility for one-time loan restructuring announced by the RBI.
SBI Card is in the process of enrolling "delinquent" customers, who did not repay after the end of moratorium, in the RBI restructuring scheme or its own repayment plan to provide them more time for repayments, a top company official said.
The loan moratorium period for loan and EMI payments ended in August but the case related to charging of additional interest rates by banks during the grace period seems to be dragging on in Supreme Court.
The Centre and RBI on Tuesday told the Supreme Court that the moratorium period on repayment of loans amid the COVID-19 pandemic is “extendable” by two years.
Most companies that availed loan moratoriums have sub-investment grade ratings and were facing challenges before the onset of the pandemic itself due to slowing economic growth, domestic ratings agency Crisil said on Monday.
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