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Retailers claim inadequate support from banks during Covid: Survey
New Delhi, June 3 - A survey by the Retailers Association of India (RAI) has found that retailers received less or no financial support from the banks amid the coronavirus pandemic and the nationwide lockdown, and more so from the private banks.
While around 52 per cent of respondents were satisfied with the financial support and services extended by public sector banks during Covid-19, around 51 per cent were dissatisfied with private banks, according to the survey.
As per the report, post the Reserve Bank of India permission for moratorium of loan repayment, more than half the retailers surveyed had not received the benefit of the moratorium from their banks.
It showed that while 54 per cent of the respondents asked their respective banks for additional working capital limit, only 15 per cent got it. PSU banks rejected around 28 per cent of all loan requests, while private banks sanctioned less than 10 per cent.
"Private banks have been much more reluctant than PSU banks to extend additional working capital loans to retailers despite directions issued by the Reserve Bank of India (RBI) and the Government of India," said an RAI statement.
Kumar Rajagopalan, CEO of RAI said: "The closure of business over the past couple of months has resulted in loss of revenue, which has rendered some of them unable to pay salaries to their staff. The reluctance of banks, especially private banks, to come to their aid is unfortunate, and could hurt not only retailers but the banks themselves."
He added that banks have made huge investments in the retail sector, and if the sector struggles to get back on its feet, a significant portion of that investment could turn into non-performing assets.
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