The industry body has requested permission for staggered equated monthly installments (EMI) plan starting with lower EMIs from July, and possibly higher amount later.

Non-banking finance companies (NBFCs) body Finance Industry Development Council (FIDC) has requested approval for ‘teaser’ kind of one-time restructuring scheme for all loans without provisioning, in a meeting with finance minister Nirmala Sitharaman via video-conference on Friday, sources close to the development told FE.

The industry body has requested permission for staggered equated monthly installments (EMI) plan starting with lower EMIs from July, and possibly higher amount later, the source added. The loans with lower initial payments, which rise later during the tenure, were termed as ‘teaser loans’ by Reserve Bank of India (RBI) in 2008.

NBFC body mentioned in the meeting that many taxi and truck drivers, marginal farmers were not sure of their cashflows due to disruption in their business cycles and had requested to be given time to gradually come back to 100% level of operations.

The non banking finance corporations also urged the FM three major changes to the measures pertaining to the Rs 30,000-crore liquidity facility, partial credit guarantee scheme and guarantee on loans of Rs 3,00,000 crore to SMEs. The industry body urged the government to extend the tenure of the special liquidity scheme for NBFCs amounting to Rs 30,000 crore to three years instead of three months. FIDC had earlier written a letter to finance minister seeking changes in the schemes. Any NBFC availing of funds under this scheme may end up in disturbing its asset/liability match, the letter further said.

FIDC has also requested the government to extend the tenure of partial credit guarantee scheme (PCGS) 2.0 worth Rs 45,000 crore to three years from the current tenure of one year. Cabinet had earlier approved partial credit guarantee scheme (PCGS) 2.0 to improve liquidity for low-rated shadow lenders and eased certain criteria for the pooled purchase of NBFC assets by state-run banks under the existing PCGS 1.0.

NBFCs also urged the finance minister to allow only secondary market participation under the Rs 30,000-crore special liquidity scheme. The government has allowed both primary and secondary market purchases under the scheme. NBFCs are of the view that mutual funds may benefit more from the scheme due to secondary market.