PNB Said – Moratorium Is Not A Permanent Solution

PNB said – Moratorium is not a permanent solution, will decide on the loan of retail customers by the end of the month. The country’s second-largest commercial bank Punjab National Bank (PNB) has also urged the government not to pursue the term loan moratorium after August 31, 2020. It has become the second major bank in the country after HDFC Bank to make such a request.

Although the Reserve Bank (RBI) has made its intention clear that banks will repay all types of term loans related to corporate loans, personal loans, but politically, the period of moratorium on term loans from March 1, 2020, onwards. There is talk of increasing it.

PNB has said that a decision will be taken by the end of this month to give relief in repayment of the loan to personal loan customers like Home, Auto. Rao said that most of his customers in an auto loan or personal loan lane have been paid. It has the highest number of government employees. All of them are getting the benefit of Moratorium for the last six months, that is, these customers have not paid the monthly installment of their loan.

Next, we will look at the case of every customer based on whether he needs relief or not. Arrangements can be made to provide relief to those whose salary has been affected. A separate rule will be made in this regard. As far as corporate loans are concerned, the solution will come out of restructuring itself.

Kamath will decide on loan accounts of more than Rs 100 crore based on the recommendations of the committee set up by RBI. He hoped that the loan of 40 thousand crore rupees may have to be restructured (giving the customer an opportunity to repay the loan with fresh and new terms). According to Rao, “PNB’s loan book currently stands at Rs 7.21 lakh crore. Of this, Rs 1.27 lakh crore has been given to the MSME sector. 14 percent is NPA.

Roughly 5-6 percent can come from restructuring. ” Rao has assumed that due to the situation created due to Covid-19, NPAs will increase for the next two to three quarters. The net NPA level was 5.39 percent as against the total advances in the quarter ended June 2020 as against 7.17 percent in June 2019.

The economy is expected to improve rapidly from October 2020 onwards and the situation may change after that. PNB estimates that excluding some sectors like tourism, aviation, then most sectors of the economy will start to improve from the third quarter (October-December 2020).