The announcement of Reserve Bank of India(RBI) a fresh round of restructuring of loans for individual and small borrowers for up to two years is a start of a possible long-drawn battle, say analysts who hailed the timely action by the central bank but fell short of giving a verdict on the impact on the sector.
The possible impact on the banking sector of the announcements is difficult to be assessed at the moment as the Covid-19 situation remains precarious, they say.
“The RBI has done something, to begin with, which addresses the concerns of, both, the lenders and the borrowers because of the uncertainty due to the rising cases and subsequent lockdowns,” says an expert. He also adds that
to pre-empt the situation and comment on the impact is extremely difficult right now because we don’t know how long the local lockdowns will stay or whether the vaccination drive will pick up sooner than expected to improve the economic situation.