Banks, NBFCs ask RBI to relax bad loan rules
A second Covid wave many times worse the first has prompted banks, non-banking financial companies (NBFCs) and small-finance banks to ask Reserve Bank of India (RBI) that flexible restructuring up to two years across all categories of borrowers be allowed. Three people aware of the development said financial institutions have asked RBI to classify the second wave as a national natural calamity. They have also asked that easier terms of repayment and moratorium on principal payments should be given to borrowers below the Rs 2 crore category, where, they say, the impact of the pandemic has been felt severely, people cited above said. They spoke on the condition of anonymity. In addition, lenders have sought a cut-off time till September 2021 for fresh restructuring proposals for all standard accounts and requested that restructuring be allowed outside the framework prescribed by the KV Kamath committee. The committee, formed in the wake of the Covid first wave, had earlier prescribed recast criteria for 26 sectors.