Over 300 retailers received little or no financial support from banks to recover from the impact of the COVID-19 crisis when they needed it, according to a survey by Retailers Association of India (RAI). As per the Bank Benefits Survey by RAI “PSU banks have been comparatively more helpful than private banks” towards retailers.

The survey, which took response from 311 retailers across India said 56 per cent had outstanding term loan facilities and 52 per cent did not get moratorium announced by the RBI on March 27.

It further said 65 per cent of respondents already had a working capital loan and 54 per cent asked for additional working capital limit (COVID limit) from respective banks. However, only 15 per cent of retailers were provided with additional working capital loans as mandated by the RBI.

While around 52 per cent of respondents are satisfied with the financial support and services extended by PSU banks during COVID-19, almost an equal percentage are dissatisfied with private banks, the RAI survey added.

“Private banks have been much more reluctant than PSU banks to extend additional working capital loans to retailers despite directions issued by the Reserve Bank of India (RBI) and the government of India,” RAI said.

Commenting on the findings, RAI CEO Kumar Rajagopalan said retailers selling both essential and non-essential items have reported a 40 per cent and 100 per cent drop in sales, respectively, due to the COVID-19 situation.

The closure of business over the past couple of months has resulted in the loss of revenue, which has rendered some of the retailers unable to pay salaries to their staff, he added.

“The reluctance of banks, especially private banks, to come to their aid is unfortunate and could hurt not only retailers but the banks themselves. Banks have made huge investments in the retail sector, and if the sector struggles to get back on its feet, a significant portion of that investment could turn into non-performing assets,” Rajagopalan said.

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