NEW DELHI: In a sign of economic activity picking up in the country post lifting of the lockdown measures, a lot lesser number of entities and individuals have come forward to take advantage of the extended period of moratorium on repayment of term loans and interest on working capital loans.
According to a research by Emkay Global Financial, while moratorium rates in Phase 2 are lower (down from 30s to 20s), mainly due to lower corporate moratorium and moderation even in retail segments like housing loans, personal loans and car loans, they have remained elevated for the commercial vehicle segment.
For micro finance players, moratorium rates fell to 30-50 per cent with collections improving, the research report said.
As part of the COVID-19 relief package, the Reserve Bank of India in early May extended the moratorium on term loans and interest on working capital loans by three months till August 31. Earlier it was given for a three-month period from March till May end.
The lowering of rates for moratorium, meaning lesser numbers opting not to repay their loan obligation during the moratorium period, is also a result of bankers becoming a bit conservative during the Phase 2 period. Unlike the blanket moratorium in Phase 1, bankers conservatively gave the 'opt-in' option apart from monthly moratoriums.
While lowering of moratorium seekers has come as a relief, there has been high level of customer overlap rate between Phase 1 and Phase 2. This is at a high of 30-40 per cent in select segments, indicating a long moratorium period for these customers, which may pose higher asset-quality risk.
Bankers suggest that job losses/pay cuts till now have been lower than expected, but one needs to be watchful as these are early days of the unlocking. However, the self-employed category (contributing 25-40 per cent of select retail loans) is badly hurt, posing a major concern, the report said. (IANS)