Business

Banks must delay declaring companies’ accounts as NPAs

Centre should ask banks to delay declaring companies’ accounts as NPAs for one year due to the economic fallout of COVID-19, the Federation of Indian Export Organisations (FIEO) said. FIEO President Sharad Kumar Saraf said the spread of Covid-19 to over 144 countries points to the most challenging times for the exports sector.

migrator

New Delhi

“Banks may be asked to delay the declaring companies’ accounts as NPA for 1 year as the lack of business coupled with fixed cost will make many accounts NPAs,” he said in a statement. “The existing working credit limits of exporters with the banks may be automatically enhanced by 25 per cent, if so desired... All existing Export Promotion Schemes must continue till March 31, 2021 at least.” He said as per current trend, MSMEs particularly in employment intensive sectors like carpets, handicrafts, apparels, footwear, gems and perishable, with their major market in Europe and the US are likely to be worst affected.

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