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​Retailers seek RBI intervention as banks unwilling to extend debt moratorium to borrowers

The country is under a three-week lockdown starting March 25 and the number of cases infected with the virus is rising steadily. The RBI had announced a moratorium under which borrowers of all the term loans were given a breather from repayments for three months.

Last Updated: Apr 01, 2020, 08.09 AM IST
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The body sought RBI's intervention to ensure that banks follow up on the announcement made by the central bank last Friday to protect the borrowers against the impact of the COVID-19 pandemic.
Mumbai: The Retailers Association of India (RAI) is seeking an extension in the moratorium on term and emergency working capital loans from the Reserve Bank with support from the Department for Promotion of Industry and Internal Trade.

The industry body warned that nearly 20% of the firms will not be able to pay wages in April for lack of funds.

The RBI announced that all lenders can freeze repayments on term loans outstanding March 1 and suspend interest payments on working capital facilities for three months. While accumulated interest can be paid later, the loans won't be in default.

However, this isn't enough, said RAI. “The retail sector will need significantly more support from banks to avoid NPA situations. We have asked to extend the moratorium to nine months as demand will take longer to stabilise,” said Kumar Rajagopalan, CEO of RAI.
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