The Union Finance Minister, Nirmala Sitharaman, has reportedly directed banks to come up with possible solutions for the tourism and hospitality sector by Friday. Banks have also been asked to take cognizance of various demands of the sector and report back on them, say sources.

The closed door meeting, held on Friday, was attended by representatives of the tourism and hospitality industry and heads of banks that include the State Bank of India, Bank of Baroda, Punjab National Bank, Central Bank and Canara Bank. Also present were representatives of the Reserve Bank of India (RBI), the Finance and Revenue secretaries and other officials of the Department of Financial Services.

Industry recommendations that were put on the table, include discussions on ECLGS (Emergency Credit Line Guarantee Scheme), moratoriums, one-time restructuring of loans, single-window clearances, and granting of infrastructure and industry status.

According to sources, other points of discussion include alternate investment fund, priority lending, the level playing field for Indian travel agents, LTA scheme to boost domestic demand, licensing, Service Exports from India Scheme, export status and skilling requirements. 

The tourism and hospitality sector has been amongst the worst hit due to the pandemic and it has been reaching out to the Centre for help, which include loan restructuring and easy finance options.

Incidentally, Finance Minister, Sitharaman during her Budget speech, earlier this month, extended the ECLGS by one year thereby casting the safety net wider, giving lenders sufficient comfort to boost credit flows to the sector. The guarantee cover will now increase by another Rs 50,000 crore, specifically targeting the sector.

“The ECLGS has provided much-needed additional credit to more than 130 lakh MSMEs. This has helped them mitigate the adverse impact of the pandemic. The hospitality and related services, especially those by micro and small enterprises, are yet to regain their pre-pandemic level of business. Considering these aspects, the ECLGS will be extended up to March 2023 and its guarantee cover will be expanded by Rs 50,000 crore to the total cover of Rs 5,00,000 crore, with the additional amount being earmarked exclusively for the hospitality and related enterprises,” she said during her Budget speech.

On February 6, the FM – during an interaction with FICCI and ASSOCHAM — assured industry captains and reiterated that the Centre would extend a helping hand to both the aviation and hospitality sectors — the two worst-hit sectors of the pandemic. The aviation industry is also struggling with rising ATF prices.

At this meeting, The FM had assured Jyotsna Suri, ex-President of FICCI, that a meeting between bank officials and hospitality industry representatives will soon be convened on issues relating to restrictions placed on the restructuring of loans and also on moratorium on repayments.