Covid-19 relief: Staggered 180-day bad-loan breather on cards for banks

RBI may allow relaxation in delinquency period, go easy on additional collateral requirements

The Reserve Bank of India (RBI) and the finance ministry may take up the issue of relaxation in the delinquency period for the classification of banks’ non-performing assets (NPAs) to 180 days, from the current 90 days.

The rescheduling of accounts classified as overdue, stressed or NPAs as of December 2019 without being downgraded, and fresh funding (with a minimum repayment period of 18 to 24 months) is to be considered. This may include going easy on the insistence for additional collateral as a pre-condition by banks.

The NPA delinquency relaxation to 180 days “may be heavily qualified to prevent its abuse”,