Non-banking finance companies (NBFC) are in a fix after Reserve Bank of India (RBI) has asked all financial institutions to offer a moratorium to their borrowers.
While NBFCs would need to give a three-month moratorium to their customers, many of them may need to service their debt obligations towards banks, mutual funds and other financial institutions.
Finance Industry Development Council (FIDC), an industry body representing NBFCs, has written to RBI and Ministry of Finance raising concerns about this.
NBFCs have different source of funding including term loans from banks and by issuing papers to investors. In the notification that RBI has issued, they have said that financial institutions are “permitted" to grant a moratorium.