A three-month moratorium, apart from the loan restructuring permitted by the central bank last month, will give much relief for small traders, said executives at smaller non-banking financial companies (NBFCs). Under the new guidelines, banks can restructure loan exposures up to ₹25 crore, which have been standard as on 31 March 2021. We are, therefore, writing to RBI to provide liquidity support to small NBFCs (with asset size of up to ₹500 cr)." Moreover, in case of moratorium, interest for the moratorium period (which is also called interest on interest) is an issue. Finance Industry Development Council (FIDC), an association of NBFCs, also believes that a moratorium is not needed now.

Source: Mint May 18, 2021 19:30 UTC