Govt to Extend Loan Repayment for Hospitality
The government is in talks with the Reserve Bank of India to allow borrowers facing financial stress due to Covid-19, put-off their loan repayments further than August 31. Nirmala Sitharaman said her ministry and RBI are working on loan restructuring for certain sectors such as real estate and hospitality, which are facing one of the biggest challenges amid the pandemic.
Restructuring is modifying the terms of the loan. Banks resort to it save borrowers from being declared defaulters and, loans from being classified as NPAs. “I fully understand the requirements of the hospitality sector on the extension of the moratorium or restructuring. We are working with RBI on this,” she said.
The hospitality sector is also the third-largest foreign exchange earner in the country. India’s nearly $250 billion hospitality industry, which contributes over 9% to the country’s GDP and provides jobs to over 40 million people, is staring at a revenue decline by Rs 90,000 crore in 2020, according to industry estimates.