Have many companies opted in for the three month moratorium on loan repayments in wake of the national lockdown? While there are no industry level numbers available, data with banks suggest that not many firms have till now taken the facility.
Private sector lenders including HDFC Bank, Axis Bank and IndusInd Bank have revealed that not many companies or even salaried retail customers have opted for the three month moratorium.
According to rating agency ICRA, about 328 companies had taken the moratorium including Air India Express, ONGC Petro Additions, The Tata Power Company, JSW Steel and Kalyan Jewellers.
In media and analysts calls after its fourth quarter results on Tuesday, Axis Bank said that about 25 to 28 per cent customers in value terms and about 10 to 11 per cent in numbers opted for the moratorium.
It had offered the moratorium on an opt-in basis for most of its products though it was on an opt-out basis for agriculture, microfinance and tractor loans. For wholesale and SME loans, the facility was on an opt-in basis. The bank said to spoke to every wholesale and retail customer and only when convinced, gave them the moratorium.
In an analyst call after its fourth quarter results, HDFC Bank had said that it was difficult to assess the number of customers availing the moratorium on the wholesale and SME banking side. It however, expected that small players with less access to the market are likely to avail this facility. It had received very few applications from wholesale customers, the bank had said.
IndusInd Bank, which announced its fourth quarter results earlier this week, also said that a very small percentage of corporate borrowers have availed moratorium.
Bankers however, said that the option to avail the moratorium is still available to borrowers and they can still request for it depending on their cash flows.
To help borrowers tide over a liquidity crunch and not default on loan repayments, the Reserve Bank of India had on March 27 announced a moratorium of three months on payment of instalments for all term loans that are due between March 1 and 31.
Retail borrowers
Most banks have also indicated that retail borrowers are also selectively taking up the moratorium facility.
“Salaried borrowers, whose salaries have not been impacted due to the lockdown or those who feel they continue to have the capacity to pay EMIs have not opted for the moratorium,” said another banker, pointing out that many others have also realised that they would have to pay interest for the deferred EMIs, which acted as a disincentive.
“Axis Bank said many retail borrowers have taken the moratorium despite having adequate balances just to preserve liquidity amidst uncertainty,” said a note by ICICI Securities.
HDFC Bank said that on the retail side also, the number of customers applying for a moratorium is in low digits, the bank said. Of those who have applied, nearly 95 to 98 per cent are not in default as on February 29 but are availing it largely from a caution perspective rather than fear of any stress. The bank surveyed about 1,000 customers to get feedback