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RBI Moratorium On Repaying Loans Should Not Be Extended: PNB
The RBI extended the moratorium as a step to mitigate the burden of debt servicing and enable continuity of viable businesses impacted by COVID-19 pandemic.
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Punjab National Bank said on Monday that the moratorium on repaying loans till August 31 as announced by the Reserve Bank of India (RBI) should not be extended as green shoots are emerging in the economy.
"The economy has seen green shoots and businesses are on recovery," said Managing Director and CEO S S Mallikarjuna Rao while addressing a virtual press conference.
Similar views were recently expressed by leading bankers like HDFC Chairman Deepak Parekh, SBI Chairman Rajnish Kumar and CII President Uday Kotak. They said some borrowers who have the ability to pay are taking advantage of the relaxation.
In March, the RBI extended the moratorium as a step to mitigate the burden of debt servicing and enable continuity of viable businesses impacted by COVID-19 pandemic.
The RBI initially allowed it for three months ending May, but later extended it till August.
Rao said PNB's loan book of Rs 30,000 crore has not opted for RBI's moratorium scheme with only 20 to 22 per cent of account holders opting for it.
He said that a one-time loan restructuring window will be provided to corporate and retail loan customers whose income has decreased due to the pandemic and subsequent lockdown.
But it will not be given to a willful defaulter. Rao expected 5 to 6 per cent of PNB's credit book may come up for restructuring.
On the merger of Oriental Bank of Commerce and Union Bank of India with PNB, he said there will be no retrenchment of employees.
"PNB has a strength of 1.03 lakh employees and, as the business grows, our employee strength will also grow," he said.
The amalgamation which came into effect from April 1 will create the second-largest public sector bank of the country -- both in terms of business and branch network.
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