The Associated Chambers of Commerce and Industry in India (ASSOCHAM) recently submitted to the government several suggestions like rollover of bank loans, further slashing interest rates, amendments to the Insolvency and Bankruptcy Code Act for putting it in abeyance for at least six months and changes in Reserve Bank of India (RBI) rules to allow banks for liberal lending.
Moratorium on equated monthly instalments on loans and corporate debt repayments needs refinement at the operational level, ASSOCHAM said in a statement focussed on steps needed to tackle the impact of the COVID-19 pandemic.The Associated Chambers of Commerce and Industry in India recently submitted to the government several suggestions like rollover of bank loans, further slashing interest rates, amendments to the Insolvency and Bankruptcy Code Act for putting it in abeyance for at least six months and changes in Reserve Bank of India rules to allow banks for liberal lending.#
Besides, RBI needs to keep a strict watch on currency movement in the foreign exchange market to guard against any volatility, it said. The chamber has also worked out and shared with the government a plan for graded reopening of the economy.
ASSOCHAM had approached the government earlier for an immediate and an impactful stimulus package without getting weighed in by any possible downgrade by global rating agencies.
In a letter on seeking liberal infusion of liquidity by the banks, the chamber had suggested 40 per cent government or RBI guarantee on fresh loans while the balance risk premium can be made up by a huge spread available to the banks between their cost of funds and the yields.
The chamber said that as stimulus worth several trillions of dollars has been unveiled by major central banks of the world, some of this money would eventually find way into the Indian equity and debt markets. But for that to happen, the Indian economy has to be kept in good shape.
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