BENGALURU: Karnataka Small Scale Industries Association (KASSIA) on Friday welcomed the RBI reducing the repo rate, and hoped the measure will yield some results as repo rates hardly ever trickle down to the borrower.
“The governor has also extended the moratorium on loans by 3 more months besides the option of converting interest payments into a term loan payable over 2021, which is a welcome measure as it may help ease NPAs. But the moratorium offered is left to the discretion of the banks and may therefore not benefit all. The extension given to the SIDBI for the term loan facility by 90 days may also help create incremental liquidity as the trend is to help add liquidity and credit to the system,” KASSIA president R Raju said.
“However, what is of serious concern is the gloomy outlook on the economy given by the governor of all round decline and even steep fall with no hope of recovery in the near future. Barring some optimism about agriculture, which may be misplaced, the general outlook seems very bleak,” he added.
The SMEs, in particular, are in dire straits in the absence of a fiscal stimulus and all round collapse of demand and disruption of supply chains and labor caused by the corona pandemic which may throw millions out of job in the absence of substantive fiscal support, he said in a statement.