News: Leadership of big banks like HDFC, Kotak Mahindra pushed for a one-time loan restructuring scheme to tackle the rising banking stress at the national council meet of the Confederation of Indian Industry (CII).
Source: Economic Times
In March, RBI had initially announced a three-month loan moratorium and later extended it by another three months till 31 August.
This deferred the obligations of all term loan borrowers from repaying the interest and principal component of the loan.
The number of borrowers availing the moratorium has gradually risen since March.
Reason for one-time loan restructuring scheme
NPAs (Non-Performing Assets) in the banking system could worsen to 12.5 per cent by March 2021 from 8.5 per cent in March 2020, as per RBI’s financial stability report released recently.
|What is one-time loan restructuring?