COVID-19 distress must not impact credit assessments, she tells bankers.
Lenders must not use coronavirus (COVID-19) related distress as a factor to determine borrowers’ creditworthiness, Union Finance Minister Nirmala Sitharaman told top bankers on Thursday. She directed them to roll out loan resolution schemes by September 15, aiming to maximise relief before the start of the festive season, according to a Finance Ministry statement.Also read | Left parties slam Nirmala Sitharaman for ‘act of God’ commentMs. Sitharaman’s meeting via video-conference with the heads of commercial banks and non-banking financial companies was aimed at reviewing their state of preparedness for implementing the loans resolution framework for COVID-19 related stress.Last month, Reserve Bank of India gave permission for one-time restructuring of corporate and retail loans without classifying them as non-performing assets, in a bid to help borrowers tide over the pandemic-related economic crisis.“During the meeting, Smt. Sitharaman impressed upon the lenders that as and when moratorium on loan repayments is lifted, borrowers must be given support and COVID-19 related distress must not impact the lenders’ assessment of their creditworthiness,” said the statement.The Minister also emphasised that bankers must immediately put in place board-approved policies for resolution, carry out widespread awareness campaigns, identify eligible borrowers and reach out to them, with quick implementation of sustained resolution plans in order to revive every viable business.Bankers gave an assurance that they have started the process of identifying eligible borrowers and would comply with the RBI’s time lines, said the statement.Reviewing the progress made on credit schemes announced as part of the Atmanirbhar package, Ms. Sitharaman advised lenders to try and extend the maximum possible relief to borrowers before the festive season. So far, only 36% or ₹1.11 lakh crore has been disbursed out of the ₹3 lakh crore Emergency Credit Line Guarantee Scheme aimed at medium, small and micro enterprises. A sum of ₹1.58 lakh crore has been sanctioned so far.
You have reached your limit for free articles this month.
To get full access, please subscribe.
Already have an account ? Sign in
Show Less Plan
Subscription Benefits Include
Find mobile-friendly version of articles from the day’s newspaper in one easy-to-read list.
Move smoothly between articles as our pages load instantly.
Enjoy reading as many articles as you wish without any limitations.
A one-stop-shop for seeing the latest updates, and managing your preferences.
A select list of articles that match your interests and tastes.
We brief you on the latest and most important developments, three times a day.
*Our Digital Subscription plans do not currently include the e-paper ,crossword, iPhone, iPad mobile applications and print. Our plans enhance your reading experience.
A letter from the Editor
Dear subscriber,Thank you!Your support for our journalism is invaluable. It’s a support for truth and fairness in journalism. It has helped us keep apace with events and happenings.The Hindu has always stood for journalism that is in the public interest. At this difficult time, it becomes even more important that we have access to information that has a bearing on our health and well-being, our lives, and livelihoods. As a subscriber, you are not only a beneficiary of our work but also its enabler.We also reiterate here the promise that our team of reporters, copy editors, fact-checkers, designers, and photographers will deliver quality journalism that stays away from vested interest and political propaganda.Suresh Nambath