The Reserve Bank of India (RBI) has notified government's interest waiver scheme. It asked lending institutions to take necessary action within stipulated timeline, which is November 5.
According to the scheme, the banks will have to find out the number of accounts with loan amount under Rs 2 crore and not deduct their interest on interest. The banks will then send the list to the government and get it reimbursed from the government.
Speaking to CNBC-TV18, Indian Banks' Association’s (IBA) Chief Sunil Mehta, YS Chakravarti, MD & CEO of Shriram City Union Finance and Krishnan Sitaraman, Senior Director at Crisil Ratings answered a few questions like - how much is the likely amount that the government will have to bear and for the banks, when will that amount come back and who pays the interest in the interim period.
“Customers should understand that the government is paying for 6 months only and not for extended tenor,” said Chakravarti.
He further said that his company may need to claim Rs 80-90 crore from the government.
IBA Chief said, “Don’t find much challenge in interest on interest case to be passed to customers by banks.”
Crisil’s Sitaraman expects a smooth process of allocation as the amount is only Rs 7,500 crore.
According to him, the gross non-performing asset (NPA) to be around 11.5 percent for FY21 versus 8.5 percent for FY20.
“Because of the restructuring we believe the amount will be lesser but it should not be much lesser than that,” he added.
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