Industry players bat for financial package by 25 per cent across the board

Industry players bat for financial package by 25 per cent across the board

As far as ailing real sector is concern, HDFC chairman Deepak Parekh suggested that the developers sell at lower prices, get rid of inventory and leverage long term relationships.

Sanjay JogUpdated: Wednesday, April 15, 2020, 07:24 AM IST
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Industry |

Mumbai: Experts and industry players have pressed for increase in credit limits for all regular banking accounts by 25 per cent across the board, change the definition of non-performing asset recognition from 90 days to 180 days till September 30, incentivise migrants to return, waiver of stamp duty and charges for limited period of time. Besides, they have suggested the Reserve Bank of India needs to look into directly buying private sector debts.

As far as ailing real sector is concern, HDFC chairman Deepak Parekh suggested that the developers sell at lower prices, get rid of inventory and leverage long term relationships. CII spokesperson said that the government and RBI will have to relax aggregate sanctioned credit limit (ASCL) norms for corporates and banks for FY20 till further notice or exclusion of up to 25% of incremental borrowing from banking sector in ASCL computation.

CII has suggested that banks should provide to MSMEs additional working capital limit equivalent to April-June wage bill of the borrowers backed by a government guarantee. Government needs to extend the three-month moratorium period allowed by RBI to six months for MSMEs and the Central Bank along with the commercial banks should look at increasing the assets of Mudra Bank and other MSME focused banks.

FICCI secretary general Dilip Chenoy said there is a need for an urgent package from the government. ‘’The Prime Minister’s directions on graded opening will help start some production activity to ensure that as soon as lockdown opens, there are no shortages faced. Even in case of essentials, supplies have started to get impacted and so easing of lockdown may help ramp up production,’’ he noted.

HDFC chairman Deepak Parekh on zoom call with realty players said they will have to compromise at this juncture and use moratorium as last resort as this is pushing the can down the road. ‘’Increase liquidity cushion, take whatever liquidity you can get at any prices, focus on existing project, not new one and take home less money this year, keep cash in the company,’’ noted Parekh.

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