All loans in Banking system Now under 6-Month Moratorium

New Delhi :The Reserve Bank of India (RBI) has said an estimated Rs 38.68 lakh crore of the total Rs 100 lakh crore worth of loan outstanding in the banking system are now under the six month moratorium as part of COVID-19 relief package.

The figure has been arrived at by taking into consideration an average 65 per cent loan moratorium requests from corporate and retail borrowers from their outstanding loan book of Rs 60 lakh crore as on December 31, 2019. This Rs 60 lakh crore outstanding loan excludes the working capital loans and the loans disbursed between January to March of 2020.

While most of the PSBs are yet to declare percentage of moratorium book, the two big banks recently announced a higher percentage share of loans under moratorium. Bank of Baroda has declared that roughly 65 per cent of its loan book by value term is under moratorium. Similarly, IDBI Bank, which was till recently a public sector bank before insurance giant LIC’s takeover, has also declared a high moratorium book share of 65-70 per cent.

Small finance banks and those dealing with micro lending like Bandhan Bank have seen more than 90 per cent of their micro loan book come under moratorium. Old private sector banks are also likely to see a very high number of borrowers by value opting for moratorium. The private sector banks’ 30 per cent moratorium book share was announced in April and May as there was no deadline or last date for seeking moratorium. The banks also gave a flexibility to borrowers to change their request or even ask for repayment of March instalment where it was paid. The second extension of moratorium till August this year is likely to increase their moratorium book.