The Prime Minister’s Office (PMO) may come forward to convince the Reserve Bank of India (RBI) on diluting its new circular regarding the provisioning for loan defaults, reported The Times of India.
According to the report, the development comes after the Union Finance Ministry failed to impress the RBI to relax the norms leading to a massive spike in provisioning by lenders and heavy loss for state-run players.
Several banks have been hit after the RBI’s February 12 circular directing lenders to provide funds for possible losses even in case of a day’s delay in loan repayment, the report said.
The report said the move came at a time when the economy was just recovering from a crisis, affecting financial health and leading to a piling of debt.
According to the report, government hopes the RBI to make some adjustments given the rapport between the Prime Minister Narendra Modi and the RBI Governor Urjit Patel.