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Extension of moratorium may lead to credit indiscipline, say bankers

A senior State Bank of India executive said the moratorium is apt for small and medium enterprises whose cash flows have been impacted severely

banks, bank merger, PSU
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A top executive of public sector bank said some able borrowers might miss payments and request for more relaxations | Illustration: Binay Sinha

Abhijit Lele
The extension of moratorium by three months beyond May is likely to expose lenders to the risk of some borrowers having the capability to pay skipping repayments, fear bankers. The move is also expected to nudge lenders to extend this leeway to borrowers like some finance companies who were not beneficiaries earlier.

A senior State Bank of India executive said the moratorium is apt for small and medium enterprises whose cash flows have been impacted severely. But that is not the case with retail borrowers (mostly salaried). Few have lost jobs, but the number is less. This segment may pose a

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First Published: May 25 2020 | 12:02 AM IST

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