Hours after the Reserve Bank of India (RBI) extended the moratorium on repayment of loans for three months on Friday, Union minister Hardeep Singh Puri said this step will offer relief to aviation sector companies like airports, airlines and ground handlers and help them improve their cash flow position.
The aviation sector has been hit hard due to the coronavirus-triggered lockdown. Consequently, during the last few weeks, all Indian airline companies have either fired employees, sent them on leave without pay or cut their salaries.
"The RBI announcement to permit lending institutions to extend the previously announced moratorium by another 3 months, i.e., from June 1, 2020 to August 31, 2020 in view of further extension in the lockdown offers relief to civil aviation stakeholders," Puri said on Twitter.
"These announcements will also benefit aviation sector companies, including airports, airlines, freight operators, ground handlers, MRO (maintenance, repair and overhaul) etc., who have availed such term loans & will enable them to improve their cash flow position," he added.
All scheduled commercial passenger flights have been suspended in India since March 25, when the Modi government imposed the nationwide lockdown to curb the spread of the deadly virus.
Earlier this week, Civil Aviation Minister Puri had announced that domestic passenger flights will resume in a calibrated manner from May 25.
The RBI on Friday unexpectedly slashed benchmark interest rates to their lowest levels since 2000 and extended the moratorium on repayment of loans for three months to ramp up support for the economy, which is likely to contract for the first time in over four decades.