Statements on today’s RBI Governor’s announcement – Press Statement

Mr. Harsh Vardhan Patodia, President CREDAI  statement  on today’s RBI Governor’s announcement.

Mumbai, 05th May 2021 (GNI): “The announcements made by the RBI Governor today reflect that the Central Bank and Government are well aware of the impact of the second wave of the pandemic, shall proactively take measures to counter the economic fallout and take necessary steps in order to revive the economy. The Rs 50,000 Cr term liquidity facility to “Ease Access to Emergency Health Services” will come as a big relief to healthcare service providers, equipment manufacturers and patients alike. The Credit to MSME and Resolution Framework 2.0 for COVID related stress assets will provide a lifeline to many struggling individuals, entrepreneurs and enterprises.

CREDAI urges and expects that similar measures which shall address concerns of large businesses and labour-intensive sectors like Real Estate will be announced in days to come. We strongly believe that measures that make accounts classified as SMA 1 and SMA 2 also eligible for restructuring and interest moratorium coupled with additional liquidity under ECLGS 3.0 passed onto real estate projects will kick-start the engines of economy and job creation which are most important to offset the effects of the second wave. Also, it is high time that the Government considers reclassification of SMA across businesses as this would ease liquidity pressure on NBFCs and Banks.

The aftereffect of the second wave will last for a much longer period because of the exponentially large number of infections and deaths and the true impact is yet to be assessed. Hence, proactive measures, much larger than those announced during the first wave of the pandemic last year, are the need of the hour.”

About CREDAI: Established in 1999, The Confederation of Real Estate Developers’ Association of India, is the apex body for private real estate developers in India, representing over 13,000 developers through 21 states and 217 city chapters across the country. CREDAI has worked hard to make the industry more organized and progressive by networking closely with government representatives, policymakers, investors. CREDAI works towards the improvement of ethical standards & business practices in real estate. CREDAI is well-recognized by the Central and State Governments in all its endeavours.

2. RBI announced today by Mr. HP Singh, Chairman & Managing Director, Satin Creditcare Network Limited.

“With the slew of measures announced we are relieved to see the government keeping an eye on all the sections of the Indian economy amidst the second wave of the deadly pandemic. At a time when the healthcare infrastructure is being pushed to the edge with the rising number of cases being reported each day, the support in the form of the creation of Covid loan books and meeting funding requirements of hospitals, medical centres, patients for the procurement of medical facilities, vaccine manufacturing for domestic inoculation comes as a sigh of relief. RBI has also recognized the hardships being faced by individuals, small businesses, MSME borrowers due to the pandemic induced lockdown by providing an extension in moratorium up to a total of 2 years as well as by providing for restructuring of loans for those having an aggregate exposure of Rs 25 crore. They no longer need to face the looming fear of losing or liquidating their businesses. We welcome the timely and prudent announcement of the targeted long term repo operation for small finance banks of up to Rs 10,000 crore and lending to smaller microfinance institutions of asset size up to Rs 500 crore under priority sector, which reflects the efforts towards financial inclusion and access to liquidity in these times of stress. While the outlook for the global economy still looks uncertain, with the growth focused measures undertaken by the government, we expect the financial conditions to ease up owing to the meaningful deployment of ample funds.”

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3. RBI Governor’s speech earlier today, following is a quote from Mr. Anshuman Panwar, Co-Founder, Creditas Solutions.

“RBI has been very pragmatic in its approach towards handling the Covid crisis. While RBI has not announced a blanket moratorium today, stressed borrowers have been given a choice to opt for resolution if required. This will ensure that only those who genuinely need restructuring of their loans will approach the banks. At the same time, it will help counter financial stress in the system. As an integral part of India’s banking system with technology led delinquency management, Creditas will also continue to guide individual borrowers on timely payments and opting for resolution mechanism if required, as mandated by RBI.”

—–ends—–GNI