Banks are restructuring the loans more than Rs 10 trillion of 5 to 6 sectors due to COVID 19. Mostly the sectors which are hit badly by the coronavirus outbreak, like Commercial real state and hospitality. And according to top officials of the bank, it is great for both lenders and customers.
Last week finance minister had asked the banks and NBFCs to roll out a one-time loan restructuring scheme for the stress caused by COVID 19. She had told to put out the scheme till September 15.
What Will Be The Benefits Of The Loan Restructuring?
There will be so many benefits to it. Bankers said that due to this the corporate structures will try to save the business their business from turning NPA. And it will also buy them some time to get the cash flowing to serve the loan of the bank. And if the account doesn’t turn NPA, banks have to make only a 10% provision against the restructured account, which is five percent less than the NPA account.
Counting the benefits, bankers also said that due to this loan structuring plan 12 to 15 percent loan book avail one-time restructuring. And micro and medium enterprises are already covered under the restructuring of the loan.
Companies in about half of vulnerable sectors like commercial real estate, hospitality, entertainment, and travel and tourism will benefit it. Punjab National Bank director had told last month that five to six percent of the loan book will go for restructuring as per the Reserve Bank of India guidelines. The Resurgent India 5 percent of the loan book will also go restructuring.
With tighter debt recast schemes of the Reserve Bank Of India, all the banks of India will have to restructure the 5 to 8 of their overall loan book. This Scheme is going to benefit both the bank and its customers.
And it will be very very helpful to those who are suffering from the aftermath of the lockdown. And the ongoing pandemic. The Finance ministry is really taking a step in a good direction.