In an interaction organised by the Confederation of Indian Industry (CII), HDFC chairman Deepak Parekh made a representation to the governor for not extending the moratorium beyond August 31. “We see that even those who can pay — whether individual or corporates — are taking advantage of the moratorium and not repaying, and it is hurting us. There is some talk that the moratorium is going to be extended, our request is that it should not be done,” said Parekh.
Parekh called for a restructuring of loans to prevent a financial crisis. “According to RBI’s projections, NPAs (non-performing assets) could be 12.5-14.7% next year. If restructuring is not given and banks, NBFCs (non-banking financial companies) and microfinance companies with this kind of NPAs will see their ratings come down, they will not have access to funding and we will have a major crisis,” said Parekh. He added that a similar restructuring was provided in 2008 and is needed to avoid a bigger problem.
Das, however, remained non-committal but said that all suggestions are being noted.
Parekh’s plea was in contrast to a representation made by Bharti Enterprises vice-chairman and past president of CII, Rakesh Bharti Mittal, calling for an extension of the moratorium. “Given the stress in the economy and the huge pressure, the moratorium extension should be seriously looked at and considered,” he said.
Mittal also called for a relaxation of foreign borrowing norms to help corporates tide over liquidity issues.