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Banks Plan to Seek Moratorium and Request Relief from RBI as Second Wave Peaks

The RBI as well as the banks are in the process of evaluating the precise impact of the second wave to resolve the extent of the moratorium that may be essential over the following few months.

As the situation of the cases are increasing it takes a toll on small and large businesses, banks are again looking to the Reserve Bank of India (RBI) for relief measures to help borrowers fight the second wave of Covid-19 and also provide some help to bank balance sheets as they face the threat of a surge in Non-Performing Assets (NPAs).

According to sources within the banking industry, both banks, as well as the RBI, are currently trying to understand and evaluate the complete impact of the current situation. Fragmented lockdowns and recoveries across the countries have cast a doubt on the trajectory of the second wave and its ramifications on businesses and the economy. But, a request for the moratorium is on the cards, sources added.   

Banks have asked for a one-year extension for accounts with commercial operation dates between March 2020 and March 31, 2021, The reason for this request is that businesses are facing multiple disruptions in course of the last one year and are back to facing it again. 

Meantime, banks have already requested three relief measures via letters, and meetings were held to discuss these matters between bank heads and RBI Governor Shaktikanta Das on April 12. Banks have sought an extension for the assessment of liberalized working capital for borrowers by the next year.

Finally, banks have asked for a one-year extension for accounts with commercial operation dates between March 2020 and March 31, 2021. The reason for this request is that businesses are facing multiple disruptions in course of the last one year and are back to facing it again. 

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