Feeling relieved after reading the morning newspaper, Sahakar Bharati leader Satish Marathe phoned Indian Cooperative to express gratitude to the Indian Banks’ Association for raising an issue Sahakar Bharati has been pleading before the Prime Minister and the Finance Minister for a long time.
The issue in question was the Indian Banks’ Association (IBA) finalising a special restructuring proposal to be offered to companies impacted by the Covid-19-induced disruption, as reported in the daily ET.
It bears recall that Sahakar Bharati had sent letters to the Prime Minister and Finance Minister earlier, seeking one-year moratorium, arguing that the times we live in are quite tough and for revival of the economy we must do out of the box thinking.
Marathe who is on the Central Board of RBI had also put forth his views on the issue before the Indian Banks’ Association about 3-4 week back. “I am happy they have given importance to the proposal”, said Marathe who had also been a member of IBA’s Managing Committee in the past.
Currently, IBA’s Managing Committee has three representatives from urban cooperative banks. They are Smita M. Sandhane, MD Saraswat Cooperative Bank, Umesh Chand Asawa, MD of AP Mahesh Cooperative and Subhash W Godbole from Nagpur Nagarik Sahakari.
Marathe is also believed to have asked them to put forth the idea of one-year moratorium before the meeting of IBA bosses, sources add.
Quoting American President Donald Trump, who has similarly given relief to banks and companies for one year, Marathe felt it is the right thing to do to revive the economy.
In its restructuring proposal IBA has demanded to allow banks to extend loan tenures without classifying them as nonperforming assets (NPAs).
“We are trying to work out a restructuring package without calling for a change in ownership while allowing the loans to remain ‘standard’. Both present as well as future cash flows of many companies have been hit due to this crisis”, ET writes quoting an IBA member.
For working capital loans that are short term, the interest payment period could be extended to three years. They are ready to involve rating agencies and auditors to ensure only companies that need it benefit from it.