Nearly Half Of All Bank Loans Went Under Moratorium, RBI Financial Stability Report Shows
Employees work in the loan clearing department at a HDFC Bank branch in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Nearly Half Of All Bank Loans Went Under Moratorium, RBI Financial Stability Report Shows

The Reserve Bank of India announced relief measures, including a loan moratorium for borrowers, after the Covid-19 outbreak and subsequent lockdowns ravaged the Indian economy.

And borrowers utilised the relief measures that came their way. Nearly half of banking customers accounting for around 50% of outstanding bank loans by value opted for the measures, according to RBI Financial Stability Report, July 2020.

The data provided by the central bank is as of April end and it is likely that the share of moratorium loans has changed since then.

The banking regulator’s analysis revealed that 55.1% of customers of scheduled commercial banks opted to defer their loan instalments. They accounted for 50% of outstanding credit. The quantum of borrowers dips to 48.6% after including non-bank lenders in the mix.

Public Sector Banks

  • 80.3% of all individual customers opted for moratorium, accounting for 80% of total outstanding individual loans.
  • The number of MSMEs availing the debt relief, too, remained high, at 73.9%. They comprised 81.5% of outstanding loans to MSMEs.
  • 28.8% of corporate borrowers availed the facility. They made up 58% of the total outstanding loans to corporate borrowers.

Private Banks

For private banks, too, loans to individuals saw the highest moratorium rates. The share of those who availed the facility was nearly half that of their state-run peers.

  • 41.8% of all individual customers opted for moratoriums, accounting for 80% of outstanding individual loans.
  • 20.9% of all MSME customers at private banks availed moratoriums, comprising 42.5% of outstanding loans to MSMEs by such lenders.
  • 21.6% of corporate borrowers availed the facility. They made up 19.6% of total outstanding loans to corporate borrowers.

Also Read: RBI Says Bank NPAs Could Rise To Highest In 20 Years

Non-Bank Lenders

The segment saw a smaller share of customers opting for moratoriums. Yet, half of the sector’s loan book remained under moratorium.

  • 60.7% of all MSME customers availed relief, comprising 61.1% of outstanding loans to MSMEs.
  • 32.5% of all individual customers opted for moratoriums, accounting for 45.9% of total outstanding individual loans by such lenders.
  • 39.7% of corporate borrowers availed the facility. They made up 56.2% of the total outstanding loans to corporate borrowers.

Also Read: Pandemic May Intensify Systemic Risks For NBFCs, RBI Says

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