Trouble for NBFCs

Repayment moratorium should be extended to NBFCs

The unprecedented nationwide lockdown to contain the spread of Covid-19, which halted economic activity, is affecting income and will make debt repayment difficult for both firms and households. In order to give relief to borrowers, the Reserve Bank of India (RBI) rightly permitted banks and other lending institutions to grant a moratorium on paying term-loan instalments for three months. This will give relief to a large number of borrowers, but non-banking financial companies (NBFCs) are in a bind. While they need to give a moratorium to their borrowers, it is not clear if NBFCs themselves will be able to avail