Lenders must not use COVID-19 related distress as a factor in determining the creditworthiness of borrowers, Finance Minister Nirmala Sitharaman told top bankers via a video conference on Thursday.
She also directed them to roll out their loan resolution schemes by September 15, aiming to maximise relief before the start of the festive season, the Finance Ministry said in a statement.
“During the meeting, Ms. Sitharaman impressed upon the lenders that as and when moratorium on loan repayments is lifted, borrowers must be given support and COVID-19 related distress must not impact the lenders’ assessment of their creditworthiness,” the Ministry said in the statement.
The Finance Minister also emphasised that bankers must immediately put in place Board-approved policies for resolution, carry out widespread awareness campaigns, identify eligible borrowers and reach out to them, with quick implementation of sustained resolution plans in order to revive every viable business.
Bankers gave an assurance that they had started the process of identifying eligible borrowers and will comply with the RBI’s timelines, the statement added.
Ms. Sitharaman advised lenders to try and extend the maximum possible relief to borrowers before the festive season. So far, only 36% or ₹1.11 lakh crore had been disbursed out of the ₹3 lakh crore Emergency Credit Line Guarantee Scheme aimed at medium, small and micro enterprises. ₹1.58 lakh crore has been sanctioned so far.
