Banks suggest re-phasing of small business loans in Vizag

Say re-paying loans in smaller tranches will help small businesses

Bankers in Andhra Pradesh have requested the Reserve Bank of India (RBI) to allow them to re-phase the loans of small businesses that had suffered losses in the recent Hudhud cyclone in Visakhapatnam and few other towns of north coastal Andhra.

The re-phasing of loans to small businesses was a new idea mooted by the banks in place of a normal one-year moratorium on repayment of loans given to the small businesses under such circumstances, according to a senior bank official.

“We all requested the RBI governor for rephrasing of loans of small businesses when he was in Hyderabad recently. He responded positively to this suggestion,” the official, said adding that the exact scheme had to be worked out only by the regulator.  

The idea was to allow small borrowers to repay their loans in small tranches as they face a very grim situation in the aftermath of the cyclone, according to the official.

Refusing to give the details of their discussions with the RBI governor, State Bank of Hyderabad (SBH) managing director Santanu Mukherjee, however, said their efforts were directed at offering relief to those who had suffered losses under the impact of Hudhud. “We will give a report to the RBI once we complete our assessment on the losses,” Mukherjee said.  

A senior government official recently told Business Standard that the local industry in Vizag had suffered a loss of Rs 800 crore as per the preliminary estimations.