RBI Likely to Announce Relief Measures

Mumbai: The Reserve Bank of India (RBI) could soon be announcing several relief measures that may include moratorium on loan repayments, easier terms for loan limit enhancement and higher credit guarantee through Export Credit Guarantee Corporation (ECGC) for exporters affected by the imposition of the 50 per cent tariffs by the United States, highly placed banking officials said. “The RBI has asked for suggestions from banks and is also holding discussions with exporters and would soon be announcing certain relief measures for the affected exporters. We have told RBI that this is a crisis just like the Covid crisis and suggested that those exporters who have high dependency on the US particularly gems and jewellery, food processing and marine, textiles be given a relief in the form of moratorium on interest payment for three months so that he can adjust his working capital or also find a new buyer country,” said a senior public sector bank official. “Banks have also suggested if such exporters could be given higher export credit insurance support from ECGC. More importantly, the bank, the government have to counsel the exporters that we are with them in this crisis period,” added the official. The government estimates that the tariffs will impact $48.2 billion worth of exports and could make shipments to the U.S. commercially unviable, triggering job losses and slower economic growth. With some exporters clients to the US already showing signs of stress some banks have asked that the 90-day non-performing asset (NPA) classification norm be temporarily relaxed to 180-days so that credit lines are not frozen to the exporters and banks also do not have to set capital for provisioning.