Working With RBI To Provide Relief To Hospitality Sector, Says Finance Minister

The government is working with the Reserve Bank of India to provide support through extension of moratorium or restructuring of loans to the hospitality industry, Finance Minister Nirmala Sitharaman said.

“I fully understand the requirements of the hospitality sector on extension of the moratorium or restructuring,” Finance Minister Nirmala Sitharaman was quoted as saying during an interaction with industry body FICCI.

Sitharaman also said the government is working with the RBI on industry’s demand for restructuring loans of businesses impacted by Covid-19 outbreak, according to a statement from Ministry of Finance.

“The focus is on restructuring. Finance Ministry is actively engaged with RBI on this,” she was quoted as saying in the statement. “In principle, the idea that there may be a restructuring required, is well taken.”

The outbreak of deadly Covid-19 virus is seen contracting Asia’s third-largest economy for the first time in four decades. The Financial Stability Report, released by the RBI earlier this month, projects gross non-performing assets of the banking sector to rise to as high as 14.7% of total loans by March 2021.

Addressing concerns raised by the industry members that small businesses aren’t getting loans under the collateral free loan scheme of the government, Sitharaman said banks cannot refuse credit to MSMEs covered under loan facility.

New Development Finance Institution

Sitharaman said that the government is working to come up with a development finance institution, and its contours will be known shortly.

The committee tasked with identifying infrastructure projects under the National Infrastructure Pipeline had suggested “an overarching, capable and empowered public institution for infrastructure planning”.

RBI Governor Shaktikanta Das, on Monday, had stressed on the need for diversifying financing option for infrastructure projects.