InvestorQ : Any idea on what is the latest status of the EMI moratorium that expires on August 31 and what could be the impact?
Mahima Roy made post

Any idea on what is the latest status of the EMI moratorium that expires on August 31 and what could be the impact?

Answer
user profile image
1 month ago


There has been no commitment either ways from the government on the EMI moratorium extension. The moratorium expires on August 31st and it appears like the EMI moratorium may not be extended beyond August 31. Markets still await final confirmation on that.

The real problem could start when the moratorium is withdrawn as it is expected to open many gaps in the books of banks. There is already a talk that banks may be forced to restructure debt substantially in most cases of stress.

Most of the stronger banks have been raising equity capital so they are cushioned to handle any asset quality shock that may arise post moratorium. However, a lot will depend on how the smaller banks react and how the retail and MSME accounts eventually turnout.