In March 2020, in a major relief to the common citizen amidst the slowing Indian economy, particularity hit by the outbreak of the coronavirus pandemic, the Reserve Bank of India (RBI) allowed borrowers to not pay any equated monthly installments (EMIs) for any loans until May 31st, subject to individual bank policy.
The Central Bank in May extended this moratorium period by another three months till August 31st. And as per reports, the RBI may extend the moratorium further for some stressed sectors such as aviation, automobiles and hospitality.
However, in an online discussion organised by CII recently, HDFC Chairman Deepak Parekh asked the RBI Governor to not extend the moratorium beyond August. He said extending the moratorium will hurt Non-Banking Finance Companies (NBFCs) as many customers who have the ability to repay are deferring payments.
Within this backdrop, we have a look at the RBI's Financial Stability Report (FSR) published last week, which gives us insight into the moratorium scheme and lending in India.
https://transfin.in/key-takeaways-from-rbi-financial-stability-report-fsr