oppn parties Loan Moratorium Should Be Extended Until December

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  • In a first, the Supreme Court recognizes marital rape, although for the limited purpose of allowing married women the right of abortion up to 24 weeks if they conceived as a result of forced sex by their husbands
  • Air India cuts discounts on base fare to students and senior citizens from 50% to 25%
  • Mallikarjun Kharge and Digvijay Singh are being touted as frontrunners to take on Shashi Tharoor in the elections for the post of Congress president
  • Sonia Gandhi will decide who will be Rajasthan CM if she feels there is a need to change guard after the near-rebellion by MLAs in the state
  • Ashok Gehlot bowed out of the race for being Congress president after meeting Sonia Gandhi
  • India has moved to the 40th spot in the innovation index, up 6 spots from last year
  • DGGI has alleged that top insurance companies, banks and NBFCs has committed a fraud of Rs 800cr by claiming input tax credit without underlying supplies
  • The Centre will borrow Rs 10000cr less than planned earlier due to good revenue collections
  • At $23.9bn, India's current account deficit widened to 2.8% in Q1, the worst in four years
  • Stocks continue to flounder on Thursday: Sensex sheds 188 points to 56409 and Nifty 40 points to 16818
  • The 36th National Games were declared open on Thusrday by PM Modi in front of a record crowd in Motera near Ahmedabad
  • Jasprit Bumrah most likely to miss T20 World Cup due to recurrence of back injury
  • PFI's political wing, the SDPI is on EC radar and action will follow soon if discrepancies are detected
  • Ashok Gehlot to meet Sonia Gandhi today, says all issues will be sorted out soon
  • Referring to the PFI ban, most Muslim organizations ask the government to take similar action against right wings organizations like the RSS, Bajrang Dal, VHP and the like
In a landmark order, Supreme Court rules that all women, married or unmarried, are entitled to safe and legal abortion up to 24 weeks of pregnancy as per the MTP Act
oppn parties
Loan Moratorium Should Be Extended Until December

By Ashwini Agarwal
First publised on 2020-04-30 08:26:45

It is becoming increasingly apparent that the 'new normal' that is being talked about is not going to be normal at all. With people staring at job losses, cuts in salaries and a huge drop in incomes, the economy will take a lot of time to get back on the rails. This is especially true as a plethora of rules will have to be followed in running business activities. People, with lesser money in hand and facing an uncertain future, will cut back on non-essential purchases for a long time to come, leading to further slowdown in the economy.

Keeping this in mind, the RBI must increase the period of moratorium on repayment of principal and interest of loans to nine months up to December. Even after that, it should direct banks not to insist upon a lump sum payment of the amount accumulated over the nine months but allow people to make the payment in a staggered manner. Since the banks are charging overdue interest as per the rules, they are unlikely to suffer a loss in doing so. Since banks are already providing extra working capital to businesses (up to 10 percent more than the sanctioned limit), they should think of extending the moratorium for other borrowers.

One knows that this will entail a complete recalculation of the EMI charts but given the economic condition, this is the least the banks can do to alleviate the sufferings of the borrowers. The lockdown and resultant mental agony, not to speak of complete stoppage of income for most businesses and salary cuts and even deferment for many employed persons, the majority of borrowers are in no position to pay timely EMIs. The situation is not likely to change much in the next four to six months. Time should be given to small borrowers to get their life back on rails after this huge disruption and they should be provided further relief by extending the moratorium.