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Letter to BS: Loan recast for limited sectors will not serve the purpose

No doubt the above sectors have been affected on the demand side directly but other sectors have also been affected due to the lockdown though the extent of the impact may vary

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Coronavirus | Lockdown

Business Standard 

Realty, steel, and power are sectors already recipients of support measures

This has reference to the article “Blanket loan recast may be off the table”(June 29). The proposal to provide for loan restructuring only to sectors like aviation, hospitality and retail is not comprehensive and will not serve the purpose. No doubt the above sectors have been affected on the demand side directly but other sectors have also been affected due to the though the extent of the impact may vary. Companies have suffered di­rectly or indirectly due to the pandemic and some of them cannot even recover fixed costs due to the and will look for some relief.

If the government wants to rationalise the restructuring and prevent its misuse it can provide three types of reliefs — namely, restructuring of loans, interest concessions and additional ad hoc funding to tide over the situation. The discretion should be available with the banks regarding whether one or all options should be extended with caveats for recompense, conversion of loans to equity etc.

M Raghuraman Mumbai


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First Published: Tue, June 30 2020. 23:30 IST
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