The RBI allowed granting the moratorium to all of the accounts which can be customary as on February 29, 2020. “Close to 90 per cent of our (eligible) clients have elected to use the moratorium,” the financial institution’s Managing Director and CEO Sanjiv Chadha mentioned whereas talking at a webinar organised by Care Ratings.
He mentioned the financial institution had adopted an opt-out mechanism for the moratorium, which implies all eligible borrowers get a moratorium except somebody particularly opts out of it.
When requested for his views on the extension of loan moratorium past May 31, 2020, Chadha mentioned a workable proposition can be to hyperlink such an providing to repayment capabilities of the borrowers.
“When it comes to extending the moratorium and when we do our working capital assessment, what we try to sort is to make sure that whatever the repayment for term loan is, it is tied to the cash flow of the company,” he mentioned.
“So, therefore, when it comes to individual borrowers, even small MSMEs, we would, and again, should the regulation allow, want to extend the moratorium which is aligned to the repayment capacity of the borrower,” he mentioned.
Chadha sees some stress within the retail loan phase because of the disruptions prompted on account of COVID-19.
“There is no doubt that this (retail) portfolio is going to be vulnerable because the kind of instruments you have to craft a customised solution for a retail borrower is not available as they are for industrial borrowers, large corporates and MSMEs. Therefore, we are going to have challenges there,” he mentioned.
Even earlier than the COVID-19 outbreak, some alerts of stress had been seen within the retail phase, he added.