NBFCs request RBI for further leeway on accessing moratorium

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Published: April 7, 2020 1:55:45 AM

The NBFCs have further requested that loan pools that have been sold to banks through securitisation transactions must also qualify for the moratorium, subject to investor approval.

There are also parts of the country where the impact is relatively lesser than others and the borrowers there are seeking a one-month deferment against a three-month one.There are also parts of the country where the impact is relatively lesser than others and the borrowers there are seeking a one-month deferment against a three-month one.

The non-banking financial company (NBFC) industry has requested the Reserve Bank of India (RBI) for some leeway in the terms of the loan moratorium announced last month. The industry is seeking that the cut-off date for non-banks to access the moratorium be extended beyond February 29, 2020, and that securitised loan pools also be made eligible for it.

Ramesh Iyer, vice chairman and MD, Mahindra & Mahindra Financial Services (MMFS), told analysts over a conference call on Monday that the industry has asked the regulator to issue some sort of directions to banks to support all NBFCs and not leave mid-sized and small firms high and dry. “In the moratorium dispensation, there has been talk around how the balances for February do not qualify for the moratorium. Most of us who are in the transportation business have been representing to say that March is the month when the government bills get settled, when transporter settlements happen and therefore if they could not transact it is unreasonable to not provide them with that support,” Iyer said.

He added that the authorities have responded well to this input and the industry expects directions to be issued around it. Iyer is also the chairman of the Finance Industry Development Council (FIDC), a representative body of lending NBFCs.

The NBFCs have further requested that loan pools that have been sold to banks through securitisation transactions must also qualify for the moratorium, subject to investor approval. As for retail borrowers who are opting for the loan moratorium, Iyer said the company has observed a clear distinction between two sets of borrowers – one comprised of small-time professionals who have the means to repay their loans and the other comprised of borrowers who are suffering a more severe loss of income and therefore need the three-month breather. There are also parts of the country where the impact is relatively lesser than others and the borrowers there are seeking a one-month deferment against a three-month one. “So, we see two kinds of disparity – one is product and customer segment-based, and the other is geographical,” Iyer said, adding that MMFS is carrying out a district-wise survey of accounts to ascertain where the negative impact of the lockdown could be higher.

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