By Aditya Raghunath
Investing.com — The Finance Industry Development Council (FIDC) has written to the Reserve Bank of India (RBI) seeking permission to restructure stressed loans given by NBFCs to retailers and small businesses, in the wake of the ongoing COVID crisis. The letter has asked for restructuring loans even if they had been restructured earlier.
“Considering the severe second wave of COVID-19, the retail borrowers, including the MSMEs, as also the retail and wholesale trader industry shall be in urgent need of support from the lenders, to revive their economic activities,” said the FIDC letter. It has requested an extension of the restructuring scheme till March 31, 2022.
The second wave of COVID-19 cases in India has caused multiple states in India to impose quasi-lockdowns and severe restrictions on movement. There are also reports in news media that there is expected to be a vaccine shortage in the country until mid-May at least. MSMEs (micro, small and medium enterprises) have borne the hardest impact of all in this second surge.
The FIDC has also requested a recast of loans by smaller NBFCs (with an asset size of less than Rs 500 crore).
It said that smaller NBFCs can only raise funds by availing term loans from banks and financial institutions like Sidbi. “We, therefore, submit that these small NBFCs may be given the benefit of getting their loans restructured (one-time) from banks and financial institutions (FIs),” said the FIDC letter.