InvestorQ : Is it true that PSU banks have to take a hit on account of the EMI moratorium costs?
diksha shah made post

Is it true that PSU banks have to take a hit on account of the EMI moratorium costs?

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Mary Joseph answered.
3 months ago
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It is estimated that the PSU banks are expected to take a write-down of Rs.2,000 crore on account of the recent Supreme Court ruling on waiver of compound interest on all loan accounts that opted for moratorium during COVID period. In the original waiver given, only loans up to Rs.2 crore had been exempted and the government had footed the bill.

Now the Supreme Court has ruled that even loans above Rs.2 crore should be exempted from the interest on interest impost. However, considering the current fiscal constraints, the government is unlikely to foot the bill this time around. Hence, PSU banks may have to eventually take a hit of Rs.2,000 crore. It remains to be seen how the RBI and the banks react, because the moratorium was meant to ease liquidity for the lower income groups.

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