The Tamil Nadu state has ordered private banks, small finance banks and microlenders to refrain from collecting loan repayments till further notice, raising the spectre of other states following suit that could create chaos and defaults.
But lenders say that they had anyway stopped doing so after the Coronavirus outbreak crippled economic activity and look forward to guidelines from the regulator in formalising a structure on how to go about doing business once the dust settles.
“We cannot put our staff at risk. We have already suspended repayment collection and loan disbursement across the country. The government direction is not going to change anything,” said Bandhan BankNSE 39.32 % managing director Chandra Shekhar Ghosh. Bandhan Bank controls about one-fourth of the Rs 2.1 lakh crore outstanding microloan pie.
Ghosh said that the bank’s microloans would not be treated as overdue since, under the loan agreement with borrowers, it is the bank’s responsibility/