The meeting of Indian Banks' Association (IBA) to discuss the crucial issue of granting a loan repayment moratorium to non-banking financial companies (NBFCs) remained inconclusive on Saturday, sources said.
Lenders were divided on the issue and have decided to approach the Reserve Bank of India (RBI) to seek clarity, sources said.
NBFCs have been demanding clarity on the applicability of the RBI's loan repayment moratorium to them.
"The issue on granting a moratorium to NBFCs was discussed at length in today's meeting. However, it was decided by the management committee that the RBI is the competent authority to take a call in this regard," a source told PTI.
"There are still some differences among bankers on interpretation of the applicability of the moratorium to NBFCs," said another source.
Banking industry lobby IBA is likely to approach the RBI next week to get some clarification on the issue.
On March 27, the RBI had announced a three-month moratorium on payment of all installments, of term loans, due between March 1, 2020 and May 31, 2020.
These shadow banking players have been offering the moratorium to their customers despite not getting one themselves from their lender-banks.
NBFCs had made a representation to RBI earlier asking for some clarity on the applicability of the three-month moratorium on them.
Banks and NBFCs were hoping to get some directions on the issue during Friday's announcement made by the RBI.
However, the RBI was silent on the matter.
The RBI on Friday announced a slew of liquidity measures to provide liquidity support to the NBFC sector.
The central bank said it will conduct targeted long-term repo operations (TLTRO 2.0) for an aggregate amount of Rs 50,000 crore, to begin with, in tranches of appropriate sizes.
The funds availed under this will have to be invested in investment grade bonds, commercial papers, and non-convertible debentures of NBFCs, with at least 50 per cent of the total amount availed going to small and midsized NBFCs and MFIs.
It also announced to provide special refinance facilities for a total amount of Rs 50,000 crore to Nabard, Sidbi and NHB to enable them to meet sectoral credit needs.