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RBI may allow one-time loan recast in construction & real estate, tourism and aviation

RBI may allow one-time loan recast in construction & real estate, tourism and aviation

With banks pushing for a one-time restructuring of loans, the Reserve Bank of India (RBI) may provide this leeway for select stressed sectors. Sectors such as tourism, hospitality and real estate have been seeking this relief to tide over the business slump resulting from effects of COVID-19 pandemic induced economic downturn.
A senior official with a leading financial services firm said restructuring of genuine cases of non-performing loans is the need of the hour, as it will allow the system to declog and start functioning. Stating that sectors such as real estate, hospitality are in dire need of the same, he called for RBI to have a sincere look into the matter.

Citing cases where just a Rs 50-100 crore additional funding may revive the project and the loan, he said the housing finance companies (HFCs), non-banking financial companies (NBFCs) and banks and not able to provide that additional funding as that too will get added to the non-performing asset (NPA) of that particular company, “the RBI needs to allow restructuring of non-performing loans and then the banks and financial institutions can analyse the cases and pick the ones that are feasible to revive.

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