21 downgrades a day since January compared with 15 between January and mid-March.

The moratorium means in case of cash crunch in these extraordinary times, you may not pay the EMIs but the bank/FI will not classify your loan as a non-performing asset (NPA).

Banks have been facing difficulty due to the shutdown following COVID-19 pandemic and a cut in LCR requirement is likely to manage their liquidity effectively.

A banking analyst told FE: “As of now, the directive is about retaining profits, but if it is extended beyond September, there could be a stock impact.”

With the countrywide lockdown set to continue for two more weeks, banks have urged the Reserve Bank of India (RBI) to extend the three-month moratorium on loans by another three months beyond May 31.

The SARFAESI Act, which is now rarely being used after the Insolvency and Bankruptcy Code has come into existence since 2016, allows banks to seize, take control, manage and sell assets of defaulting borrowers without the intervention of any court/tribunal and also ensures speedy recovery.

'Thanks for all you’re doing,' the artist said in a note for hospital workers. 'I hope this brightens the place up a bit, even if it’s only black and white.'

RBI clarified that any amount that is not used within the given time frame would attract a penal interest – the prevailing policy repo rate plus 200 basis points for the number of days the money remained unused.

The Yes Bank crisis, coupled with the coronavirus outbreak, may have some dire impact on India’s smaller private sector banks.

In 2017-18, the RBI permitted several PSBs under the prompt corrective action (PCA) framework to buy back AT-1 securities and lower the risk of a trigger event occurring under Basel-III rules.

According to dealers, firms like Reliance Industries (RIL), NABARD, and Tata Steel are likely to hit the bond market on Thursday with an intention to raise a cumulative Rs 15,000 crore.

Private banks are also understood to be entertaining requests for a moratorium as some of them have exposure to microfinance borrowers themselves and have a good sense of the market.

Banks are required to hold LCR which is 100 per cent equivalent of projected cash outflows during the 30-day stress scenario.

To tackle the current crisis arisen from the COVID-19 outbreak and the consequent nationwide lockdown, the government and the RBI have announced many measures to ease the stress of businesses. 

The loan moratorium, as suggested by the Reserve Bank of India (RBI) last month and subsequently implemented by various lenders across the country, might be able to provide some temporary relief for now but could also play a hand in changing the credit landscape of the banking sector.

The other financial institutions who had come to Yes Bank’s rescue in May continue to hold on to their stakes, with State Bank of India (SBI) holding a 48.21% share.

NBFCs have been asking for a bail-out in the form of a government credit guarantee or a TARP –like structure.

The window was announced after the markets were roiled by news, last Thursday, of Franklin Templeton MF winding up six of its debt funds amid mounting redemptions. It will remain open till May 11.

This classification will require banks to make provisions of 100% of the total amount due to them as per Reserve Bank of India (RBI) guidelines.

Accordingly, all regulatory returns required to be submitted by such entities to the Department of Regulation can be submitted with a delay of up to 30 days from the due date.

Earlier in the week, the Reserve Bank had announced Rs 50,000-crore SLF-MF scheme to bailout the mutual funds facing redemption pressure.

On Thursday, the RBI said banks would be eligible for regulatory benefits irrespective of whether they supported MFs with resources from the special window or otherwise.

Implementation of three months moratorium on repayment of loan instalments announced by the RBI was also reviewed during the meeting.

Banks could review extending the moratorium to non-banking financial companies (NBFCs) after a meeting with the Reserve Bank of India (RBI) on Saturday.

The loan has been disbursed under a refinance scheme by Nabard from its own resources and was given this week, it said.

Having come up with emergency credit lines to help businesses weather the Covid storm, banks are seeing little demand for fresh credit at this stage.

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