Indian government-owned Punjab National Bank (PNB) has decided to offer a one-time loan restructuring to its corporate and retail customers impacted by the coronavirus crisis.

As  a part of the move, the lender expects to restructure loans worth nearly INR400bn ($5.3bn).

The latest move comes after RBI allowed banks to execute a one-time restructuring of corporate and personal loans for accounts facing stress due to the Covid-19 pandemic, earlier this month.

Companies and individuals whose loan defaults are in default for not more than 30 days as of on 1 March 2020 will only be eligible to apply for the one-time restructuring.

For retail borrowers, banks can invoke this plan until 31 December 2020, and implement it within 90 days.

In the case of corporate borrowers, banks can implement the plan until 30 June 2021.

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PNB MD and CEO Mallikarjuna Rao said: “Our total loan book is INR7.21trn ($97.22bn) at June end. MSME (loan book) stands at INR1.27trn ($17.12bn). Out of this, 14% is under NPA.

“Now with respect to the book that we are looking at for loan restructuring, a rough estimate what we are seeing is that anything around 5-6% of the credit book may be eligible under the restructuring profile.”

The lender said that only 20-25% applied for the moratorium and added that the repayment window should not exceed beyond August 2020.

Speaking on the credit growth, Rao added: “The economy has seen green shoots and businesses are on recovery. We still maintain that our overall credit growth would be around 4-6%.

“We are expecting the economy to come back more effectively from October onwards. Though some of the sectors would be impacted, it will take longer period for them to recover.”

Indian lenders including HDFC, SBI, Kotak Mahindra Bank have also shared similar views on extension of loan moratorium.