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Extension Of Moratorium Could Hit Banks

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Banking stocks fell like non-pins in trade, as soon as the RBI Governor announced the extension of the loan Moratorium by another three months, until Aug 31, 2020.

Banks, which are likely to get adversely impacted by the economic slowdown, posed by the Covid-19, are likely to be hit even further.

Extension Of Moratorium Could Hit Banks
 

Categories like MFIs, retail and agriculture are likely to be the biggest areas of concern as far as banks are concerned. A bank like Bandhan Bank, which had a solid portfolio of microfinance loans, saw a moratorium of almost 71 per cent. A further, three month extension could lead to difficulties for many most banks.

Take a look at what happened, immediately after the announcement, the stock of ICICI Bank crashed 4 per cent, while Bandhan Bank fell almost 5 per cent and even stock like HDFC Bank took a knock of 2 per cent. Interestingly, most of the banking stocks were trading higher, ahead of the RBI governor press briefing.

Read more about: rbi banks moratorium
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