Over 300 retailers received inadequate or no support during lockdown: RAI survey
More than 300 retailers have reported receiving inadequate or no financial support from banks to help them weather the coronavirus crisis, the Retailers Association of India found in its new survey.
Out of the 311 retailers from across India that the RAI surveyed for its latest report, ‘Bank Benefits Survey’, 56% said they had outstanding term loan facilities, the Press Trust of India reported. Out of the surveyed retailer businesses, 52% stated that they did not get the moratorium, which was announced by the Reserve Bank of India on March 27, according to the survey.
The RAI’s survey showed that: “PSU [public sector undertaking] banks have been comparatively more helpful than private banks,” towards retailers.
Out of the 311 businesses, 65% said that they already had a working capital loan and 54% had requested an additional working capital limit from the banks they work with. Only 15% of the surveyed businesses responded that they had been provided with the additional working capital loans which had been mandated by the RBI.
“Private banks have been much more reluctant than PSU banks to extend additional working capital loans to retailers despite directions issued by the RBI and the Government of India,” said the RAI, the Press Trust of India reported.
Both ‘essential’ goods and ‘non-essential’ goods retailers have seen sales drop due to Covid-19 and the pan-India lockdown, according to the RAI.
The organisation opined that the reluctance of banks to aid retail businesses will not only harm retailers but will also prove harmful to the banks themselves. As Indian banks have invested in the country’s retail sector, if retail businesses fail, the banks’ investments in the sector could turn into non-performing assets, according to the RAI.
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