Centre working with RBI on need for loan restructuring: Nirmala Sitharaman

Finance Minister Nirmala Sitharaman said the government is working with the RBI on need for restructuring loans to help industry tide over the impact of COVID-19.

“The focus is on restructuring,” she said while addressing a FICCI event.

“The Finance Ministry is actively engaged with the RBI on this. In principle, the idea that there may be a restructuring required, is well taken,” Ms. Sitharaman said.

The Finance Minister also said the decision on reducing GST rates on healthcare and other products will be taken by the GST Council.

She said the Ministry was working with the RBI on demand from the hospitality sector for extension of moratorium, or restructuring.

To help borrowers deal with the liquidity crunch during the pandemic, the Reserve Bank of India (RBI) had announced a three-month loan moratorium in March, which was later extended by another three months. Borrowers opting for loan moratorium can defer payment of the interest and principal component of the loan during this period.

On the difficulties faced by the MSMEs in taking loans under the government’s Emergency Credit Guarantee Scheme, she said: “Banks cannot refuse credit to MSMEs covered under the facility. If refused, such instances must be reported. I will look into it.”

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