Finance Ministry has asked the Reserve Bank of India to consider emergency measures to help borrowers cope with economic pressure triggered by the COVID 19 outbreak.
Department of Financial Services Secretary Debashish Panda reportedly wrote a letter to the RBI on Tuesday suggesting a moratorium of a few months on the payment of equated monthly installments (EMIs), interest and loan repayments and a relaxation in the classification of bad loans, The Economic Times quoted a source as saying.
The letter focused on the relief measures for the individuals and businesses as they face massive loss of income due to lockdown in the country.
India Inc faces a big economic challenge going ahead after the government ordered a 21-day lockdown to contain the spread of the deadly virus. On Tuesday, Prime Minister Narendra Modi had announced a nationwide 21-day lockdown from March 25.
Coronavirus outbreak has led to reduced business activity and has already resulted in layoffs and salary cuts.
Earlier today, Congress president Sonia Gandhi wrote to PM Modi, urging the government to defer EMI and loan repayments for a period of six months. "Centre might consider deferring all EMIs for 6 months; interest charged by banks for this period may consequently be waived. All loan instalment deductions from salaries of government employees may also be deferred for six months," she said.
Meanwhile, Finance Minister Nirmala Sitharaman has announced a comprehensive package of Rs 1.7 lakh crore for the economically weaker sections of the society hit by coronavirus. In her second address to the media within a week, Sitharaman announced Rs 50 lakh medical insurance cover per person for healthcare workers, sanitation workers, paramadeics, doctors and nurses who are exposing themselves to the virus.
She also announced that the government will pay the EPF contribution both of the employer and the employee for the next three months. This scheme will be applicable for organisations with up to 100 employees, where 90 per cent of employees draw less than Rs 15,000 salary.
By Chitranjan Kumar