Union Finance Minister Nirmala Sitharaman on Thursday said the government is discussing with the Reserve Bank of India (RBI) for loan restructuring of companies which are stressed owing to the Covid-19 pandemic. Speaking at a webinar organized by the Chennai International Centre (CIC), Sitharaman said that discussions are on with the RBI on the matter of one-time restructuring of loans.

IN WHAT may bring borrowers a huge relief, the government is in active discussion with the Reserve Bank of India to offer a one-time loan restructuring plan to companies for them to survive the adverse impact of Covid-19 pandemic, Finance Minister Nirmala Sitharaman said Thursday. She also stressed the need for banks to pass on the benefits of repo rate cuts by reducing interest rates aggressively and indicated that the benefit of the emergency credit line guarantee scheme (ECLGS) would be extended to individual borrowers such as truck owners.

She also said that discussions are on with the RBI and the banks as to why the interest rate reductions are not passed on to the customers.

According to her, the reasons for banks not fully passing on the benefit of interest rate reductions are not convincing.

Sitharaman said the government will also consider providing an emergency line of credit to individual owners of businesses while a decision on the suggestion to offer collateral-free credit based on pending Goods and Services Tax (GST) bills will be deliberated upon.

Presently the Rs 3 lakh emergency line of credit is being offered to Micro, Small, and Medium Enterprises (MSMEs).

She also urged the Indian industries to introspect on how businesses are run and on how the ‘Aatmanirbhar Bharat’ mission could be realized to its full potential.

Pointing out the active pharmaceutical ingredients (APIs) for example, Sitharaman said that India is a big market and they should be manufactured in the country without depending on one or two countries.

The finance minister also said that the correction of inverted duty structure under the Goods and Services Tax (GST) regime should happen faster, assuring the industry that discussions on the issue were on in the GST Council meetings. “We are continuously talking in the GST Council about it and we are also making sure that the Council will correct all the inversions so that refunds don’t stand out as a sore thumb and two, inversion itself is unfair. So, we have to make sure that it is corrected and we are working on that. But the pace at which it has to be done has to be faster, I concede that,” she said.