Letter to BS: Extending moratorium will make it harder for everyone

Tinkering with the NPA norms will merely push the problem to a later date

The Reserve Bank of India (RBI) and the banks in general are in a dilemma whether to end or extend the moratorium on August 31. Ending it when the economy is yet to start recovering will mean large scale loan defaults. Extending the moratorium beyond August 31, on the other hand, will allow little time to the banks to pursue recovery. Since interests and charges continue to accrue, the borrowers will be staring at mammoth repayments when the moratorium is finally lifted. Presuming that even half of the MSME, personal, auto and credit card account holders default, there will be