The Reserve Bank of India (RBI) will not extend the moratorium on loan repayments after it ends on 31 August.
RBI Governor Shatikanta Das said that the moratorium on loans was a temporary solution in the context of the lockdown, while a resolution framework will provide durable relief to borrowers facing covid-related stress.
In March, RBI introduced the loan moratorium to provide relief to borrowers and enable continuity of viable businesses impacted by covid-19 pandemic. According to RBI data, nearly half of the customers accounting for around half of outstanding bank loans availed of the benefit.
Later, RBI allowed debt recast for both corporate and retail borrowers. Lenders can extend the repayment period by a maximum of two years, allowing respite in a situation where covid-19 has left millions jobless, curtailing their ability to repay existing debt.