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Moratorium period exceeding six months may result in vitiating overall credit discipline: RBI to SC

Moratorium period exceeding six months may result in vitiating overall credit discipline: RBI to SC

Finance
NEW DELHI: A loan moratorium exceeding six months might result in “vitiating the overall credit discipline”, which will have a “debilitating impact” on the process of credit creation in the economy, the Reserve Bank of India has told the Supreme Court. In an affidavit filed in the apex court in the loan moratorium case, the RBI has said that a long moratorium period could impact credit behaviour of borrowers and increase the risks of delinquencies post resumption of scheduled payments. The banking regulator fled the affidavit in pursuance to the apex court's October 5 order asking the Centre and the RBI to place on record the K V Kamath committee recommendations on debt restructuring because of COVID-19 related stress on various sectors as well as the notifications and circulars issued ...