By Ankur Mishra
Loans under moratorium have not significantly declined since April 2020, when 50% of outstanding loans were under moratorium according to Reserve Bank of India (RBI) data. In a response to a Right to Information (RTI) query filed by FE, the RBI has said 37.91% of outstanding loans in the banking system were under moratorium as on August 31, 2020. According to provisional data provided by the regulator, 41.33% of loans in public sector banks (PSBs) were under moratorium till August this year. Similarly, loans under moratorium in private banks remained at 33.96% and the same was 20.93% for foreign banks.
Data shared by the RBI show that 12.09% fewer borrowers (by value) were granted moratorium in the second phase, compared to the first phase. In its financial stability report released in July, the RBI said 50% of total outstanding in the banking system was under moratorium as on April 30, 2020. The regulator had earlier allowed customers to avail a repayment break for six months – between March and August. The moratorium was granted in two phases of three months each starting March 1.
Krishnan Sitaraman, senior director, Crisil Ratings, said 37.91% of loans under moratorium seems a little higher than expectation. It looks like there could be higher degree of moratorium sought by retail customers.
Anil Gupta, sector head, financial sector ratings, ICRA, said: “Out of six equated monthly instalments (EMIs), if a borrower did not pay a single instalment, then he may be qualified for moratorium by the RBI.” The number of customers who have not paid a single EMI between March and August is more important, he added. “If you go by collection data released by banks, those borrowers who did not pay a single EMI may be less than 10%,” Gupta said.
ICRA had earlier said 27% of companies rated by it opted for moratorium till August end. The rating agency on Monday said gross and net non-performing assets (NPAs) of banks are likely to rise in near term. While gross NPAs are expected to rise 10.1-10.6%, net NPAs are likely to rise 3.1-3.2% by March 2021. ICRA has also revised its loan restructuring estimates downward to 2.5-4.5% of advances, against 5-8% earlier.
The RBI had allowed restructuring of loans impacted by Covid-19 after the moratorium ended in August.
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