India central bank allows fresh moratorium for small borrowers as COVID-19 cases spike By Reuters

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© Reuters. FILE PHOTO: A Reserve Bank of India (RBI) logo is seen at the gate of its office in New Delhi, India, November 9, 2018. REUTERS/Altaf Hussain/File Photo

MUMBAI (Reuters) – India’s central bank asked banks on Wednesday to let certain borrowers have more time to repay loans, among other support measures, amid a major second wave of COVID-19 infections in the country that has led to strict lockdowns in several states.

The moratorium will be available to individuals and small and medium enterprises that did not restructure their loans in 2020 and were classified as standard accounts till March 2021, Reserve Bank of India Governor Shaktikanta Das told reporters.

“Small businesses and financial entities at the grassroot level are bearing the biggest brunt of the second wave of infections,” Das said, as he announced a slew of other measures to enhance liquidity and boost lending to various needy sectors.

The fresh round of moratoriums will be applicable for borrowers with a total exposure of 250 million rupees ($3.39 million), Das said.

Businesses in India have been hit hard by the new round of lockdowns over the past month to curb the spread of the virus just as many were inching back to normalcy from the nationwide lockdown last year.

India recorded 382,315 new infections over the last 24 hours to reach a total of 20.67 million, while deaths rose by a record 3,780 to 226,188, health ministry data showed. Experts say actual numbers could be five to 10 times higher.

Bankers had asked the RBI for the three-month moratorium, particularly for retail and small borrowers, news channel CNBC-TV18 said on Wednesday, citing unidentified sources.

Last year, the central bank declared a moratorium for a total of six months for all borrowers.

($1 = 73.8 rupees)

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