'Moratorium extension may stretch asset-liability mismatch of NBFCs'

As the Reserve Bank of India (RBI) has allowed an extension of loan moratorium for three more months, a report by Motilal Oswal Financial Services said that although the move comes as a relief for the borrowers, it may stretch the mismatch in asset-liability management (ALM) for many non-banking finance companies (NBFCs). "The RBI has announced an extension of three months for the existing loan moratorium, i.e., banks and NBFCs are now eligible to grant moratorium till Aug 31, 2020. In our view, this is a mixed bag for NBFCs -- while it provides relief to the borrowers, also further stretches the ALM mismatch for many NBFCs."

—Agencies it