There is a growing clamour from India Inc for a mortgage holiday in the wake of the coronavirus outbreak that threatens to roil the world economy.

Several countries in the west, such as the US, the UK and Italy, have already announced such a measure to provide a cushion to mortgage takers who are staring at the grim prospect of a loss of income and resultant job losses.

In a letter to Prime Minister Narendra Modi, Hemant Kanoria, chairman of Srei Infrastructure Finance, pleaded that banks should also waive penalty and late fees on mortgages.

“A blanket moratorium on debt repayments for a year can assuage business continuity risk of corporate and individual. The governments in the US, the UK, Italy and many other countries have already advised the banks and financial institutions to declare mortgage holidays for their customers along with waiving late fees and other penalties,” Kanoria wrote.

Rajeev Singh, director general of the Indian Chamber of Commerce, concurred. According to him, several industries as well as individuals would face a hard time because of a severe disruption in the payment cycle.

“There will be a working capital shortage due to lack of economic activities. It will put pressure on the corporates to fulfil their loan obligations to banks,” Singh said.

ICC, headed by president Mayank Jalan, has also urged the government to relax bad loan recognition norms for one year.

While industry associations such as the Confederation of Indian Industry and ICC have prayed for a stimulus package mirroring those in the UK and the US, they are mindful of the fact that the Modi government does not have the fiscal space to grant such a largesse.

“Given that tax collections will surely come down, the only silver lining for the country could be the bounty of low international crude oil prices,” Singh added.