With loan repayments showing slippages, banks have urged the Reserve Bank of India (RBI) to extend the existing deadline for facilitating the restructuring of defaulting accounts to December 30.

A day after the Budget, bankers met top RBI officials, including governor D Subbarao and three deputy governors (Usha Thorat, Shyamala Gopinath and KC Chakrabarty) to take stock of the current situation and offer suggestions for the forthcoming first quarter review of annual credit and monetary policy in July. They discussed a range of issues like non-performing assets, government borrowing programme and infrastructure finance. Earlier this year, the RBI had announced the loan restructuring facility in certain sectors facing a slowdown like real estate up to June 30.

Bhatt said the RBI's deadline for restructuring of accounts by banks ended by June 30. "But in the case consortium lending where there are dozens of banks, the process is taking a lot of time because bankers have to meet and they have to go back to their management committees or boards. On the other hand, borrowers too have to go to their management on the issue. So, in some cases, the processes cannot be over by June 30, though the process has already commenced.

“So, there was a request that some more time could be given and it would be better if the time was extended until December as in the case of agricultural relief which the government has already done.”

Bankers also said there was not much credit growth in the system. “At least, during the first quarter of this year, there is not much credit growth. The consensus is that there are signs available in the economy. Despite business activities improving across multiple sectors, economic activities are not showing up in bank lending. But more credit growth will take place now than the last quarter and in the second half of the year, it is going to be much, much better,” Bhatt said.

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