Tag: Debt moratorium

The 2016 Insolvency and Bankruptcy Code (IBC) is a landmark legislation with the potential to impact every borrower. This paper focuses on Part III of the IBC, which deals with natural persons, proprietorships, and personal guarantors for corporate debt. Through the paper, we attempt to estimate the potential consequences of the Fresh Start Process (FSP) defined under this Part. The IBC lays out economic criteria that can qualify (or disqualify) an applicant for FSP. Under FSP, a borrower must be asset-lite, have a low income, and hold minimal outstanding debt to qualify. These thresholds determine the applicability of the process once the IBC is fully notified. Thus, empirical estimates regarding the effects of the provisions on the Indian credit market are crucial to deciphering the impact of the IBC, more specifically, the FSP.

Governments and lenders provide loan moratoria to help struggling borrowers, particularly during an economic crisis. While it can provide relief to borrowers, such a policy also has a possibility of inducing moral hazard among the beneficiaries.

In this blog post-through a case study, we analyse how microcredit borrowers availed the debt moratarium and through that identify how much they may have been impacted by COVID-19 and lockdowns.

In this post, we investigate the cost of Interest on Interest (IoI), that emerged out of the RBI’s policy to grant a 6-month debt moratorium

In the wake of COVID-19 related lockdown and the resultant impact on the financial lives of millions of households, the Reserve Bank of India (RBI) approved a series of regulatory measures, which among others, enabled lending institutions to provide their borrowers with a 6 month-repayment moratorium on term loans. A debt moratorium at this scale […]

Given the extent of liquidity shock caused by Covid-19, the Reserve Bank of India enabled all lending institutions to provide their borrowers with a repayment moratorium on term loans until 31 August 2020.