There are reports that the govt is inclined to consider the demand of banking sector that includes the urban cooperative banking sector as well on the issue of relaxation in the NPA norms, among other things.
Media reports say the Finance Ministry has asked the RBI to reconsider the norms applicable to bad loans, in the wake of slowdown in business due to the Corona Virus.
Quoting ET, Business Today reports “Department of Financial Services Secretary Debashish Panda reportedly wrote a letter to the RBI on Tuesday suggesting a moratorium of a few months on the payment of equated monthly instalments (EMIs), interest and loan repayments and a relaxation in the classification of bad loans”.
Earlier, Nafcub President Jyotindra Mehta had demanded, among other things, change in the NPA norm from the present 90 days to 180 days. In a letter addressed to the RBI, Mehta had listed issues being faced by the urban cooperative banking sector in the wake of Corona threat looming large over the nation.
Nafcub top bosses are meeting at regular intervals through the software ZOOM and are monitoring the situation from minute to minute, said D Krishna who is closely associated with the exercises.
A former CE of Nafcub, Krishna got locked down in Bangalore where he had gone to oversee the preparations of Belgaum UCBs at the behest of HK Patil. “Though the meeting got cancelled due to the Corona I remain stuck here in Bangalore while my wife is in Delhi”, he added.
Nafcub has also requested the RBI to allow the banks to make changes well before 31st March 2020. IBA has also made some recommendations on behalf of the entire banking industry in this regard.
Without going into any details of the reasons for making the request on behalf of the urban cooperative banking sector, as they are very well known to all including the Regulator, we submit the following for your immediate consideration, goes on the letter.
Nafcub President argued that in the given situation one does not have to emphasise the position of the economy and more particularly that of the MSMEs, small business, and self-employed people of small means who all form the bulk of the clientele of the urban banks.
“If significant time bound relaxations are not provided as submitted above, the sector and its clientele will be very badly affected” Mehta said.
Meanwhile, Finance Minister Nirmala Sitharaman has announced a comprehensive package of Rs 1.7 lakh crore for the economically weaker sections of the society hit by coronavirus.