Suggesting the rescheduling of loan accounts, RBI member writes a letter to PM

The director of The Reserve Bank, Satish Marathe has requested the PM of India that the banks should be asked to reschedule the loan accounts in order to help the MSMEs and other industry and to fight against the pandemic outbreak together.

He wrote- “These are exceptional times and the need is to take exceptional steps. “We need to seek active involvement of our banking sector to rebuild the economy. If Advances Accounts get classified as NPAs, due to both lockdown and slowdown, chances of revival of such accounts would be bleak, as bank Officials continue to be apprehensive of possible future investigations by CVC, CAG & CBI. the lockdown and the slowdown have completely disrupted operations of our manufacturing Sector comprising small, medium and large units, crippled our supply chains and small and retails business and also lakhs of Units in the unorganized Sector have almost come to a complete stand still.”

He has suggested to keep in abeyance, the norms that are relating to income recognition and assets classification, reporting to credit information, downgrade of borrow al accounts and etc. All of them should get classified as NPA in this financial year.