By Aditya Raghunath
Investing.com -- A PTI (Press Trust of India) report has said that PSU (public sector unit) banks will have to bear a burden of Rs 1,800 crore to Rs 2,000 crore that might arise on the back of an SC (Supreme Court) judgment.
The SC had said that compound interest or interest on interest had to be waived for all loan accounts that opted for the moratorium between March-August 2020. Any amount that was already charged would have to be refunded, credited, or adjusted to the customer.
The report said, “According to banking sources, initially 60% of borrowers availed moratorium and gradually the percentage came down to 40% and even less as collection improved with ease in lockdown. In case of corporate, this was as low as 25% as far as public sector banks were concerned.”
The IBA (Indian Banks Association) has written to the government to compensate lenders for this loss in income. The government has said it will take a call after considering various factors.
The Nifty PSU Bank is trading down 4.54% as of this report. Canara Bank Ltd (NS:CNBK) is down 6.59%, State Bank Of India (NS:SBI) and Indian Overseas Bank (NS:IOBK) are both down over 4.7% each.