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SBI Chairman Seeks Govt Guarantees to Enable Banks to Lend to Companies

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The State Bank of India’s Chairman Rajnish Kumar has sought government guarantees to enable banks to lend to companies to enable post-lockdown economic recovery and also stressed on the need to extend the moratorium on repayment of loan to six months.

He was addressing a webinar conducted by Naredco. Kumar said banks can play a critical role of intermediation by lending to corporates if the government provides them with the risk capital or extends guarantees against corporate loan defaults and the RBI gives them liquidity support for the purpose.

Kumar said lenders, through the Indian Banks’ Association, will request for raising the loan moratorium period.

“Even if the government guarantees the incremental lending, that will be of much help,” he said.

Kumar said that the economy needs support at multiple levels. First at the macro level to address the entire economy. Then at sector level to address most affected industries like transport, hotel, restaurants and others, and finally at micro level to address the problems faced by a specific unit.

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