Moratorium extension will lead to debt pile-up: Sunil Mehta, CEO, IBA

In an interview, SUNIL MEHTA discusses with Somesh Jha the demerits of extending the loan moratorium window and argues why it is the right time for the regulator to allow banks to restructure loans

The Indian Banks’ Association (IBA) has asked the Reserve Bank of India (RBI) to allow one-time restructuring of loans across the board, but at the discretion of bankers. In a telephonic interview, IBA Chief Executive Officer SUNIL MEHTA discusses with Somesh Jha the demerits of extending the loan moratorium window and argues why it is the right time for the regulator to allow banks to restructure loans, but with adequate caution. Edited excerpts:

Stress levels are ambiguous due to the moratorium. Credit outlook is bleak without a vaccine.
 

Credit growth is correlated with economic activity. Credit growth is gaining traction