Economy

RBI recommendation for moratorium on EMI repayments half-hearted, says Chidambaram

Senior Congress leader P. Chidambaram wears a mask at Parliament. File

Senior Congress leader P. Chidambaram wears a mask at Parliament. File   | Photo Credit: PTI

He, however, welcomes central bank’s move to infuse liquidity into the markets

Former Finance Minister P. Chidambaram on Friday welcomed the Reserve Bank of India’s (RBI) move to infuse liquidity into the markets but claimed that its recommendation for a three-month moratorium on EMI repayments was ‘half-hearted’.

“I welcome the RBI’s decision to cut the repo rate and measures to provide more liquidity,” Mr. Chidambaram said on Twitter soon after RBI governor Shakti Kanta Das announced the decisions taken by the Monetary Policy Committee (MPC) of the central bank.

Apart from increasing liquidity with steps such as reducing the cash reserve ratio, the RBI announced that banks are permitted to allow a three-month moratorium on payment of EMIs on all term loans that were outstanding on March 1.

 

Mr. Chidambaram, however, called this move ‘half-hearted’ as the central bank left it to the discretion of the commercial banks to extend this benefit.

“However, the RBI’s direction on deferment of EMI dates is ambiguous and half-hearted,” he said.

“The demand is that all EMI due dates must be automatically deferred. I had suggested that all due dates falling before June 30 may be deferred to June 30. Borrowers have been made dependent on the bank concerned and will be disappointed,” Mr. Chidambaram added.

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Printable version | May 30, 2020 7:47:24 PM | https://www.thehindu.com/business/Economy/rbi-recommendation-for-moratorium-on-emi-repayments-half-hearted-says-chidambaram/article31179839.ece

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