PRESS RELEAS OF FM –RELIEF AND RELAXATION IN FINANCIAL SERVICES IN VIEW OF COVID 19 – more relief is desirable for deferment of EMI of housing and other loans.

[DEV KUMAR KOTHARI]

Here in this article  author has  analysed  press release about  relaxations and relief allowed in view of COVID 19 which is in nature of a sever force measure because life, expectancy of life, health, relations, are effected by the crisis.

About Financial services some relief have in fact been announced, however, relief of one is burden on others. For example relief to bank account holders, debit card holders will be a burden on banks who are already facing tough time due to growing NPA’s , difficulties in granting and disbursing loans etc.

So far personal  customers of banks are concerned many will have severe cash crunch due to – loss or partial loss of employment, reduced earnings, late payments of salary , remuneration , professional and technical fees, other business receipts etc.

Desirable relief:

For time being many will have to depend on savings and borrowings to manage family affairs also.

In such circumstances relaxation from payment of EMI of loans taken for houses,  cars and other assets by individual is desirable. This can be granted by allowing deferment of 3-4 EMI without any interest reduction or waiver for extended period- means just to allow deferment with interest. This will not cause loss to banks. In fact, in present situation, banks will be in a position to maintain healthy good loans position.

From Press Release Posted On: 24 MAR 2020 5:10 PM by PIB Delhi

From press release with highlights added:	Observations
Financial Services
1.Relaxations for 3 months:	In view of grim situations relaxation for 6 months is desirable.
Debit cardholders to withdraw cash for free from any other banks’ ATM for 3 months	How far these services will be available is to be seen. In fact, withdrawal of cash from ATM of any bank should be without any charge to customers. Costs should be sahred by banks based on r number of ATM any bank has and volume of transaction for other bank.
Waiver of minimum balance fee	Minimum balance fees should be based on average balance for a year and not on monthly or quarterly basis. In case of monthly basis , perhaps accounting charges are more than minimum fees  collected from large number of accounts..
Reduced bank charges for digital trade transactions for all trade finance consumers	This will be a burden on bank, and merchant.