The Retailers Association of India (RAI) released a survey in which over 300 retailers have received limited or no financial support from banks to overcome the repercussion of the ongoing COVID-19 crisis.
According to RAI’s Bank Benefit Survey, PSU banks have been comparatively more helpful than private banks.
As per the revelations in the survey, additional working capital limit benefits were between 2.3% and 40%, the average processing time for the working capital loan was 21 days for PSU banks and 35 days for private banks.
Retailers Association of India conducted the aforementioned survey in which they collated the response of 311 Retailers. Of this, 56 percent had outstanding loan facilities, while 52 percent did not get the Moratorium announced by RBI on 27 March.
65% already have a Working Capital loan
The findings suggest 65 percent of the respondents already have working capital loans, and 54 percent have asked for additional working capital limits (COVID limit) from the respective banks. However, only 15 percent of retailers were provided additional working capital loans, as mandated by the RBI.
52% Dissatisfied with Private Banks
Furthermore, the RAI’s survey stated that about 52 percent of respondents are satisfied with the financial support and services extended by PSU banks during Covid-19, but an equal percentage of retailers are dissatisfied with private banks.
Recently, RAI commented on its extensive survey that “Private banks have been more reluctant than PSU banks to give additional working capital loans to retailers despite directives issued by the Reserve Bank of India (RBI) and the Government of India,”.
100% Loss to Retailers Selling Non-Essential Items
Based on the answers received in the survey, Kumar Rajagopalan, CEO of the Retailers Association of India, said that because of COVID-19, 40 percent of the sales of retailers selling essential commodities and 100 percent of the sales of retailers selling non-essential items. The decline has been recorded.
He said there has been a loss of revenue in the last few months because of the closure of business, due to.which some retailers have also been unable to pay salaries to their employees. The reluctance of banks, especially private banks, is unfortunate for retailers. This can cause great harm to them.
The RBI, in April, had roused banks to grant more by cutting the reverse repo rate by 25 basis points, easing bad-loan rules, and assigning a three-month moratorium for payment EMI’s due between the 1st of March and the 31st of May 2020.