Is there an option to restructure the existing loan?
Questioned by Restem K J, Kerala
Restructuring of existing loans can be facilitated by methods like Debt rescheduling and Interest rate deduction. The key objective of a comprehensive and timely business loan restructuring will help you to get access to sufficient finance to sustain businesses. You may request your bank / NBFC to relax the terms and conditions of your existing loan. This may result in discount of charges, dropping of interest rate, increase of the loan tenure, a moratorium on interest, etc. If your reasons are genuine, the banks / NBFC usually give you leeway. Loan restructuring may be implemented only if you want to improve tasks and reconsider your strategies for growth. Financial challenges will be there in a business cycle, but the important part is to overcome them with a systematic and sensible approach.
Will there be any option where the client gets working capital to restart his business and repayment of loan starts after 4 - 5 months ?
Questioned by HEMRAJ KUMAWAT, Rajasthan
The Micro Finance Institutions (MFIs) have always played a critical role in times of crisis, in extending financial assistance and reviving life back to normalcy. The microfinance sector has stood by its customers ensuring confidence and credit at the grassroots when it is needed the most. Public sector lenders - Canara Bank, UCO Bank and Indian Overseas Bank have come out with some relief measures and announced emergency credit line for its customers. The State Bank of India also announced an emergency credit line to meet any liquidity mismatch for its borrowers. SBI has an IND- COVID Emergency Credit Line (IBCECL) for large corporates that provides additional funding of up to 10 per cent of the Working Capital Limits (both Fund Based and Non Fund Based limits) with a maximum limit of Rs 100 crore.
How will the #RestartIndia Campaign help to reduce the gaps in cash flows for general public and customers ?
Questioned by Shakti Singh Rajawat, Rajasthan
#RestartIndia helps provide information on relevant financial schemes available especially for those affected by the Pandemic. Our website www.restartindia.in is an interactive forum wherein anyone can post questions and have their queries resolved by experts from various industries. A part of our campaign aims at educating the customer in a moment of crisis such as the current one. and so the website and relevant campaign communication will contain information people can use to seek out solutions for their challenges or avenues through which they can have their queries answered. For e.g. information on some financial services companies that may have come up with new product offerings and modified some existing products to suit the ever evolving needs of our customers especially in these difficult times.
What are the new schemes for large scale industries?
Questioned by Karthik B Nair, Kerala
The companies with greater turnover rate and the companies with no or lesser loan repayment due can avail new loans or top up loans if the respective bank or financial institution approves the request. Most of the companies are facing competition from other foreign companies. Considering this, the government may prohibit global tenures in government procurement tenders up to Rs.200 crores. There could be essential amendments in the General Financial Rules based on the gravity of the situation.
What are the new schemes for small scale and medium scale industries?
Questioned by Gireesh pg, Kerala
The government has introduced new schemes for small scale and medium scale industries including Collateral-free loans. In the article published by The Hindu on 17 May 2020, it is reported that on 12 May 2020, Prime Minister Narendra Modi announced a 20-lakh crore economic relief package titled Atmanirbhar Bharat Abhiyan. The first allotment is aimed at micro, small and medium enterprises and non-banking financial companies (NBFCs). All MSMEs with a turnover of up to 100 crore and with outstanding credit of up to 25 crore will be eligible to borrow up to 20% of their total outstanding credit as on February 29, 2020 (The emergency Credit Line Guarantee Scheme). There is also a proposal to infuse equity into MSMEs through a Fund of funds system and CGTMSE scheme is also available. The respective State Governments and other financial institutions are also facilitating new schemes for small scale and medium scale industries. Kindly check your eligibility with your nearest financial service provider.
How will the liquidity crunch in the market be stabilised, what are the ways to improve economy and GDP?
Questioned by Shiva, Telangana
The Covid-19 outbreak has seen the worst liquidity crisis, with unstable cash flows and low reserves and also with restrictions to seek additional debt has also brought immense pressure on business. Considering the gravity of the situation, RBI had already announced a series of measures to revive the ailing economy stuck by the financial effects of the pandemic as follows:1) Firstly long term repos operations (TLTRO) of Rs.50,000 crore was announced targeted at the NBFC sector.2) Secondly the reverse repo was reduced in order to encourage banks to deploy these funds for lending purposes, the RBI reduced reverse repo from 4% to 3.75%.3) The third step was the RBI’s measure meant for the states to avail short-term funds up to 60 per cent of the existing limit to fight the deadly disease.4) And finally the Liquidity Coverage Ratio has been brought down to 80 percent from 100 per cent earlier. This will be restored in phases by April 2021.Although economic growth looks slump for now, there is huge potential in biotechnology, health infrastructure. pharmaceutical and sustainable growth and living which will help in rebooting the economy. However the GDP growth for the year, according Goldman Sachs, is likely to shrink by 5% in FY 2020 – 21.
For businesses and businessmen and women, such as- Outdoor site vendors, BTL Event managers etc. ,the lockdown has not just reduced business, it has virtually closed the business. Is there any forum to help such businesses tide over the situation? Any possibility of support in terms of demand generation ?
Questioned by Sreechaitanya, Kerala
The Pandemic has almost reduced human interactions and gatherings to near zero, which has in turn affected businesses involving the same. However, slowly and steadily things are opening up. Below-The-Line (BTL) marketing activation and Out-of-home advertising etc. are increasing with time; with industries and sectors coming up with new products which need to be advertised; there is a slow but steady rise for need of advertisement. W.r.t BTL activation, new plans/ways need to be devised through which message can be communicated efficiently without involving mass gathering; one of the best possible ways to do so is "Influencer Marketing" which is gaining momentum in the recent time and has potential to grow even more. There is an urgent need for evolved forms of BTL to come to the fore.
How can we ensure the smooth movement of raw materials to be used in various products?
Questioned by GRACE FRANCIS, Kerala
Most businesses today are facing issues in the supply chain because of the looming uncertainties of lockdown, containment etc in various parts of the country (and the world). However, the good news is that these issues are gradually getting sorted, as more and more logistics companies adopt contactless, digital delivery standards. For a start, check the standards that your supplier is following. If there are other players in your industry (competitors) being able to procure their raw materials, try to identify how those companies are handling their logistics. Try to adopt those methods temporarily at the very least. If your business has a way to source the raw materials locally (nearer to your base, for eg- local farmers), now would be a good time to explore those options.
Post Covid-19, Is it possible to provide larger loan amounts than earlier to the customers ? So that we can fulfil our financial needs in the best possible manner.
Questioned by SAJITH K A, Kerala
As per RBI regulations, banks and NBFCs disbursing Gold Loans have a maximum limit of 75% Loan to Value for the gold Jewellery pledged. Muthoot Fincorp Ltd. has recently introduced Super Value Gold Loan to help customers get maximum value for their gold. To help small businesses in need, Muthoot Fincorp has also started a new product - Ashwas Dinam Gold Loan with 180 days of steady interest rate. These initiatives are helpful to meet the financial needs of customers.
As we all know that due to the current situation various sectors are facing issues, mostly the daily wage workers. What can be done to help these workers?
Questioned by GRACE FRANCIS, Kerala
Mahatma Gandhi National Rural Employment Gurantee Act (MNREGA) will be the key for governments to create employment at large scale for daily wagers. Also some state governments like UP have started great schemes for daily wagers. In a different perspective, migration of the labour force to their native lands is a big boon for agriculture which is facing an acute shortage of people.
#RestartIndia Response Network