Transporters' body urges RBI to extend EMI moratorium for road transport sector1 min read . Updated: 18 Aug 2020, 04:16 PM IST
In March, the central bank had allowed a three-month moratorium on payment of all term loans due between March 1, 2020, and May 31, 2020, which in May was extended by another three months till August.
Apex transporters body AIMTC on Tuesday urged the Reserve Bank of India (RBI) to extend the moratorium on payment of loans for road transport sector till December 31, saying the sector was reeling under financial crisis.
In March, the central bank had allowed a three-month moratorium on payment of all term loans due between March 1, 2020, and May 31, 2020, which in May was extended by another three months till August to provide much-needed relief to borrowers whose income has been hit due to the coronavirus crisis.
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"The road transport sector in India is highly distressed, reeling in deep financial crisis due to fallout of corona-induced lockdowns and there is little hope of its revival in the current Financial Year...The critical condition of the road transport sector is impacting more than 20 crore people, directly and indirectly," AIMTC said in a letter to the RBI Governor.
Urging it to extend the moratorium on payment of loans, it said after the extension of current moratorium period till August 31, 2020, majority of transporters are merely making break-even, and that is only because their EMIs are under moratorium.
"The throughput of interstate lorries has dropped significantly due to lack of return loads and paralysed demand...The condition of small operators across all segments, both cargo and passengers, who constitute about 85 per cent of the population, is indeed precarious," AIMTC President Kultaran Singh Atwal said in the letter.
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The letter mentioned that the taxes, diesel price, corruption and toll continue to increase the operating costs, but freight remains subdued due to weak demand.
"At present, about 50 per cent of the vehicles are still off the road and once the current moratorium period is over there would be spurt in NPAs (non-performing assets)," it said.
Reiterating that the transporters are unable to pay their EMIs and the moratorium provided them little relief, AIMTC said they are being pressurised "by the recovery agents of Banks, NBFCs and Financiers to pay up their EMIs or face seizure of the vehicles".
All India Motor Transport Congress (AIMTC) is the apex body for transporters representing about 95 lakh truckers and entities.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.