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Background
In the wake of the disruption caused by the global pandemic,
now called ominously called pitted against the Great
Depression of 1930s and hence called The Great
Lockdown[1], several countries have taken measures to try
and provide stimulus packages to mitigate the impact of
COVID-19[2]. Several countries, including India, provided or
permitted financial institutions to grant ‘moratorium’, ‘loan
modification’ or ‘forbearance’ on scheduled payments of their
loan obligations being impacted by the financial hardship
caused by the pandemic.
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The above was relief only granted to banks and not NBFCs.
RBI has now decided to extend a similar treatment to loans
given by NBFCs to commercial real estate. This will provide
relief to NBFCs as well as the real estate sector.
Particulars USA
Forbearance –
Whether interest will accrue or not? Student loans moratorium – Interest wil
accrue on such loans.
Forbearance Plan –
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Particulars USA
Mortgage forbearance –
[1]https://blogs.imf.org/2020/04/14/the-great-lockdown-
worst-economic-downturn-since-the-great-depression/
[2]The IMF has introduced a Policy tracker for tracking all
policy reforms due to COVID-19 across the globe –
https://www.imf.org/en/Topics/imf-and-covid19/Policy-
Responses-to-COVID-19
[3]https://www.rbi.org.in/Scripts/NotificationUser.aspx?
Id=11835&Mode=0
[4]http://vinodkothari.com/2020/03/moratorium-on-loans-
due-to-covid-19-disruption/
[5]W.P.(C) URGENT 5/2020
[6]https://rbidocs.rbi.org.in/rdocs/Content/PDFs/GOVERNORSTATEM
[7]https://www.bis.org/bcbs/publ/d498.pdf
[9]https://cdn.ifrs.org/-/media/feature/supporting-
implementation/ifrs-9/ifrs-9-ecl-and-coronavirus.pdf?la=en
[10]https://www.rbi.org.in/scripts/BS_CircularIndexDisplay.aspx?
Id=11806
Tags: asset classification, COVID-19, RBI
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