Banks Can Revamp India Loans With Bad Debt Surging
- Reserve Bank of India leaves interest rates unchanged
- Loan restructuring plans come ahead of moratorium expiry
A cyclist rides past the Reserve Bank of India headquarters in Mumbai.
Photographer: Dhiraj Singh/BloombergThis article is for subscribers only.
India’s banking regulator gave lenders power to restructure certain loans, as authorities look to support an economy hit by the pandemic while ensuring the stability of a financial sector where bad-debt is set to swell to a two-decade high.
Ahead of the expiry of a blanket loan moratorium later this month, the Reserve Bank of India said it will permit banks to strike rescheduling agreements with borrowers that were on track to repay their loans on March 1, in the early days of the coronavirus outbreak. The measures were announced in the RBI’s policy statement Thursday, where it left interest rates unchanged.