Banks have done "sweet nothing" to provide financing to retailers to tide over the lockdown crisis, and the government intervention is needed to avoid mass unemployment in the sector, according to RAI.
Banks have done "sweet nothing" to provide financing to retailers to tide over the lockdown crisis, and the government intervention is needed to avoid mass unemployment in the sector, according to RAI.
The retail industry body claimed that despite the Reserve Bank of India (RBI) circulars to banks to lend support to businesses, on the ground retailers are finding it difficult to access funds from banks for various reasons.
"The banks are not giving any kind of finance to retailers although RBI has stepped in. It is not happening on the ground. Banks have done sweet nothing in this whole situation to help retailers in this country," Retailers Association of India (RAI) CEO Kumar Rajagopalan told PTI.
He claimed that the RBI circulars have been "set aside for want of various things, including new business plans" as a result of that retailers are unable to get financing from banks which would have been otherwise used for "paying salaries" and other fixed costs as they have zero income at present.
Seeking the Centre's intervention, Rajagopalan said, "We want clarifications from the government on this because there is serious issue of shops shutting down and a big amount of unemployment happening. There is zero income for retailers".
Stressing that all industries are dependent on retail for sales, he said, "If retail does not work, production is of no use. We want that clarification to come. We want the Centre to support us on that part".
When asked about job losses in the retail sector, Rajagolapan said, "Retailers themselves have become unemployed, and now they cannot be paying any salaries. They don't have any money".
As part of measures to support the economy hit hard by a coronavirus-led slowdown, earlier this month the RBI had announced slew of measures including asking banks to lend more by cutting the reverse repo rate by 25 basis points, easing of bad-loan rules and a three-month moratorium for payment of all instalments falling due between March 1, 2020 and May 31, 2020 although interest would continue to accrue on the outstanding portion of the term loans during the moratorium.First Anniversary Offer: Subscribe to Moneycontrol PRO’s annual plan for ₹1/- per day for the first year and claim exclusive benefits worth ₹20,000. Coupon code: PRO365
