In an online discussion, organised by the Confederation of Indian Industries, Parekh said extending the moratorium will hurt non-banking finance companies as many customers who have the ability to repay are deferring payments.

“Please do not extend the moratorium. We see that even people who have ability to pay whether it’s corporates or individuals are taking advantage under this and deferring payment. We hear that there is some talk of extending the moratorium. It’s going to hurt and hurt smaller NBFCs,” Parekh said.

Mint had reported on 23 July that RBI may allow banks to offer moratorium to stressed sectors such as aviation, hospitality etc. The banking regulator has been conducting an impact assessment of sectors and borrower segments by collating data on repayments and cash flows of borrowers since the lockdown was announced in March to get a better understanding of the challenges faced by borrowers, the report said.

During the meeting, Parekh also suggested that the RBI should look at buying corporate bond papers like other central banks. He also said financial institutions should be allowed to do restructuring of future prolems.

While Das did not comment on the suggestion of extending the moratorium, he said RBI buying corporate bonds is not ruled out.

“The law doesn’t permit RBI to buy corporate bonds. We have to recognise the fact that liquidity support we have gone through long term repo operations. The issuance of corporate bonds in the first quarter is about ₹1 lakh crore, much more than the issuance in the corresponding first quarter of last year, Das said.

“Most of the resources have gone into AAA and A rated bonds. Considering the kind of complaints which we saw in March, the position has improved. RBI remains extremely vigilant. We are monitoring the situation. As and when required we will not hesitate to take action,” Das added.

RBI, in its financial stability report released last week, had projected non-performing assets to rise to 20-year high to 12.5% of total advances by March 2021. The central bank has warned that if the economic conditions worsen further, the ratio may soar to 14.7% under the very severely stressed scenario.