homeretail NewsBanks send notices to malls for loan repayment, says report

Banks send notices to malls for loan repayment, says report

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By CNBC-TV18 Apr 22, 2020 3:13:41 PM IST (Updated)

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Banks send notices to malls for loan repayment, says report
Leading public sector banks have sent notices to mall owners across the country asking them for loan repayment, reported Business Standard. The notices, that invoke contractual obligations under the lease rental discounting (LRD) facility, come after fears emerged that these accounts might become non-performing assets, the report said.

The banks have now asked the malls to raise invoices for the month of April, said the report. Further, they have also directed mall owners to ask their tenants to make rental payments in the escrow account of the respective bank, the report added.
The move has been met with opposition by the Shopping Centers Association of India (SCAI), the report said. As per the association, the move will impact about half of the malls and may force them to default on payments. This could ultimately lead to NPAs of over Rs 25,000 crore, the report added.
“Many mall owners have received letters from their banks invoking LRD obligations. They have not extended the three-month moratorium on loans, as announced by the Reserve Bank of India, which we have bought to the notice of the RBI. The industry will see huge NPAs if we don’t get a moratorium on our loans for anything between 9-12 months and loss of jobs in millions,” Amitabh Taneja, chairman of the association was quoted as saying in the report
The association has approached the RBI claiming that the malls are not being offered the benefits of three-month moratorium announced by the central bank, the report said.

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