Banking lobby Indian Banks’ Association (IBA) is planning to meet on Saturday to take decision pertaining to the extension of the three-month repayment moratorium on loans to NBFCs, according to sources.
As directed by the Reserve Bank of India (RBI), the Non-banking finance companies (NBFCs) are offering the moratorium to their customers but they are not getting it from their lender-banks.
Earlier, they had made a representation to the Reserve Bank of India (RBI) requesting them for offering some clarity on the applicability of the three-month moratorium to NBFCs and were expecting to get the same in the RBI’s announcements on Friday.
However, the RBI has not shared any clarification on the demand made by NBFCs in Friday’s announcements.
“There is an IBA meeting on Saturday. There, banks are hopefully going to take a call on extending moratorium to NBFCs,” a source told PTI.
On March 27, the central bank had made announcements on a three-month moratorium on payment of all instalments of term loans, due between March 1, 2020 and May 31, 2020.
The RBI on Friday made several announcements pertaining to liquidity measures to support the NBFC sector.
The central bank said it will be conducting targeted long-term repo operations (TLTRO 2.0) for an aggregate amount of Rs 50,000 crore, to begin with, in tranches of appropriate sizes.
The funds availed under this will have to be invested in the form of investment grade bonds, commercial paper, and non-convertible debentures of NBFCs, with at least 50 percent of the total amount availed going to small and mid-sized NBFCs and MFIs.
Besides, it was announced that a special refinance facilities will be provided for a total amount of Rs 50,000 crore to Nabard, Sidbi and NHB to enable them to meet sectoral credit needs.