The Reserve Bank of India (RBI) has allowed three-month moratorium on bank term loans and working capital finance offered by it.
To this end, RBI has allowed banks to put on hold equated monthly installments (EMI) payments on all term loans for three months, slashed the cost of fresh borrowing by cutting policy interest rate by steepest in more than 11 years and infused a massive Rs 3.74 trillion liquidity.
The move comes in response to COVID-19 outbreak and is likely to offer some short-term cash-flow respite and improve the liquidity levels of telcos, especially Vodafone Idea and Bharti Airtel.
As per Cellular Operators Association of India (COAI), telecom operators are likely to opt for three-month moratorium in order to avoid cash crunch during the lockdown.
To this end, COAI says that the operators have spoken in favour of raising mobile call and internet rates at the earliest, however, they will keep the prices stable during the lockdown period.
As per industry experts, government should consider a three-month moratorium on operators’ revenue-share commitments for the April-June quarter of financial year 2021, which would be more significant relief for the sector.
