Tamil Nadu Chief Minister M K Stalin on Thursday urged the Centre to direct banks to provide borrowers including MSMEs and traders in cyclone Michaung affected northern districts of Tamil Nadu, a three-month moratorium on the repayment of their loans.
The livelihood of about 37 lakh families in Chennai, Chengelpet, Kancheepuram and Tiruvallur districts has seen significant disruption and damage to properties, Stalin said in a letter to Union Finance Minister Nirmala Sitharaman.
Although the state government has been able to restore normalcy in their daily lives, the impact on their livelihood still lingers for many. "Small businessmen, traders and MSME units impacted by the floods are yet to return to their regular economic activities." Many of these families and business entities have availed loans for various purposes and they would be finding it impossible to repay their dues in these difficult circumstances.
There is an urgent need to mitigate the burden of immediate debt servicing by relaxing repayment schedules till they come out of this crisis, Stalin urged.
The CM requested Sitharaman to direct all commercial banks, (including regional rural banks, small finance banks and local area banks), co-operative banks, financial institutions, Non-banking Financial Companies (including housing finance firms) to provide moratorium.
It is for 3 months from December 1, 2023 to February 29, 2024 on payment of all instalments in respect of all term loans availed by families and business units in these four districts. Such loans include agricultural term loans, retail and crop loans as well.
"The repayment schedule and all subsequent due dates, as well as the tenor for such loans may be shifted across the board by three months." As regards working capital facilities sanctioned in the form of cash credit/overdraft, the lending institutions may be permitted to allow a deferment of three months on payment of interest on all such facilities, outstanding as on December 1, 2023.
Meanwhile, a meeting of bankers and insurance firms was held here by Minister for Micro, Small and Medium Enterprises, T M Anbarasan to lend a helping hand to flood affected MSMEs.
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