Signed by its national President and General Secretary, Sahakar Bharati has written a letter requesting the Union Finance Minister to consider all Receipts accrued till 30th Sept 2020 in finalizing the accounts for the year ending 31st March 2020, among other things.
Calling it an unprecedented situation in the wake of Corona scare, Sahakar Bharati argues that the announcements made by the RBI earlier, would make little impact – both on the borrowers and the lenders.
Other demands made by the duo of Ramesh Vaidya and Dr Uday Joshi, President and General Secretary respectively include relaxation be given to classify NPAs by increasing the delinquency norm from 90 Days to 180 Days.
Audited position as on 30th Sept 2020 of a Bank be considered for determining CAMEL Rating and classification under FSWM. (IND AS 10 Accounting Standard relates to events after the reporting period. Institute of Chartered Accountants of India (ICAI) contemplates that an entity should adjust its financial statements for events after the reporting period, the letter states.
“Bank should be allowed to Reschedule all borrowal accounts which may have been classified/identified as Overdue, Stressed and NPA up to 31st Dec 2019 without the same being downgraded”, the leaders argue.
They demand that interest accrued but not received after 1st Jan 2020 be allowed to be paid in six monthly instalments commencing from 1st Oct 2020 to 31st March 2021. As regards reduction in margins in respect of Book Debts and Raw Materials – Stocks, Semi-Finished and Finished Goods the same be uniformly reduced to 25% and 15% respectively, it says.
“Particularly as the recoveries are stretched and very slow, all Receivables up to 180 days be considered for computation of drawing power for facility under Book Debts. For sanctioning additional need – based advance facilities – Demand/Term Loan and Working capital facilities – both Fund Based & Non Fund Based – to existing accounts mentioned in item 3 above, additional collateral should NOT be insisted/be a Pre-condition.
In such a situation, to reverse the slowdown and give impetus for revival of Economy, provide employment and gainful income earning opportunities, we need bold initiatives to support Indian Industry, particularly the MSME segment, the letter demanded.
“We trust you will consider our suggestions and formulate a Directed Policy for all Banks & Financial Institutions”, sign off the duo from Sahakar Bharati.