COVID-19: Shopping centres' body seeks moratorium on loan repayments till March 2021

Mumbai: Shopping centres are heavily impacted by the coronavirus outbreak and the subsequent lockdown which may result in bank loans of over Rs 25,000 crore turning bad, an industry body said on Thursday, seeking relief measures from the Reserve Bank.

The Shopping Centres Association of India, which claims to be a top enabler of organised retail in the country by representing thousands of shopping centres, has also written to RBI Governor Shaktikanta Das seeking to extend the moratorium on loan payments at least till March 2021 and also loan recasts for the industry players.

It can be noted that shopping centres and malls, which tend to attract a lot of crowds, have been shut since mid-March, much before the lockdown was announced and if the social distancing strategies continue post lockdown as well, such facilities are unlikely to open.

Apart from the extension in the moratorium, the association has also sought a one-time restructuring of loans on lower interest rates, working capital finance facilities and non-classification of the accounts as NPA till March 2021 in the letter sent on Tuesday.

It said the industry provides direct livelihood to over 12 million people and many more if we were to consider the indirect impact, as industries like entertainment, fashion, food and beverages are served by it.

Even as the facilities are shut, the industry is incurring fixed costs salaries, facility maintenance charges, utilities and ongoing routine expense even as it is not getting any rental revenue from clients, it said.

Stating that the banking industry has a Rs 70,000 crore exposure to the lease rental discounting instrument, it said banks have now begun to enforce the contractual obligations by directing the mall owners to deposit rental incomes in escrow accounts for April as well.