COVID-19 impacted stress accounts monitoring has been saved
COVID-19 impacted stress accounts monitoring
Covid-19 has impacted the ability of organisations to generate cash and fulfil their debt obligations, while continuing to meet performance targets and client and stakeholder expectations. While the Reserve Bank of India recently announced a three month moratorium on repayments, the government is considering amending the Insolvency and Bankruptcy Code to provide moratorium (at least 6 months) with a view to avert Covid-19 induced insolvency. Additionally, certain banks have introduced emergency loans for their corporate clients, MSMEs, retail borrowers and self-help groups.
While these actions are expected so that the industry can recover, it is equally important to see to it that banks don’t fail. Banks are already shouldering the burden of stressed assets and will need to closely monitor who they are lending to and the credit facilities provided so as to identify any concerns in a proactive manner.