Financial Institutions (FIs) have so far approved over 3.3 million requests for concessions, amounting to a total of Rs. 5,994 billion during the different phases of moratoria and concessions, the Central Bank data revealed.
The Central Bank requests Financial Institutions to provide appropriate concessions to the affected borrowers while preventing any elevated strain on the financial sector.
These concessions include;
a. Concessions for credit facilities: Restructuring/rescheduling of performing and non-performing credit facilities, on a case-by-case basis, consequent to an objective assessment by FIs, on the future repayment capacity/viability of the business.
b. Suspension of recovery actions: Suspending recovery actions against credit facilities classified as non-performing on or after 01.01.2020, on a case-by-case basis, consequent to an objective assessment by FIs on the future repayment capacity/viability of businesses, upon the condition that the borrower submits an acceptable repayment plan.
c. Early settlement of facilities: LBs to consider the requests made by borrowers to settle their credit facilities early, without paying any additional fee.
In the case of lease facilities, recovery of future interest also to be waived off. NBFIs to consider early settlement of existing performing or rescheduled credit facilities, by applying a reduced rate for early settlement charges and recovery of future interest.
Eligible borrowers are requested to contact the respective financial institutions with relevant information and documents to discuss and agree on repayment plans.
Borrowers are expected to commence repayment as agreed with the FIs, as non-repayment of loan obligations for a longer period, would result in unwarranted strains on both FIs and on borrowers.