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The Syndicate Bank Retired Staff Organisation (SBRSO) has urged the Centre and the Reserve Bank of India (RBI) to declare a moratorium on the repayment of home loans, education loans and vehicle loans.
The Covid-19 pandemic is expected to put the salaried and middle-class, as well as those employed abroad, to a lot of uncertainty and hardship, affecting their capacity to service these retail loans.
Their recovery could pose a problem given that the Covid-19 impact may last for quite some time, says KS Bhat, General Secretary, SBRSO. This could lead to defaults, and, progressively, conversion of some into NPAs.
A few State governments have already instructed banks to declare a moratorium on loans.
“Since March also means the end of the financial year, we request the Reserve Bank to act swiftly on the matter and prevent a likely pile-up of NPAs,” Bhat said. He also requested the Centre to postpone the merger proceedings of public sector banks since the entire industry is in turmoil, employees are in distress, and life on standstill due to the general lockdown conditions.
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