Travel restrictions over the past month has hurt the tourism and hospitality industries hard. The situation worsened after India suspended both international and domestic flights
Hit by the novel coronavirus, or COVID-19, outbreak, real estate, tourism and hospitality companies have sought relief in loan repayments, citing the ‘Act of God’ clause, The Economic Times reported.
“Act of God” is a legal term used to describe events outside of human control and activity, and is invoked if a business is impacted by circumstance such as natural calamity, epidemic or war.
Travel restrictions over the past month has hurt the tourism and hospitality industries hard. The situation worsened after India suspended both international and domestic flights.
Prime Minister Narendra Modi announced a 21-day lockdown starting from March 25. This will force employees across all sectors to stay at home, except those in essential services.
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Moneycontrol could not independently verify the story.
“We have started receiving requests from several companies citing “Act of God” clause to restructure loans and provid leeway in repayments. In some cases, these loans are upwards of Rs 200 crore,” the article quotes a banker as saying.
Lenders are seeking an industry wide asset classification forbearance from the Reserve Bank of India (RBI), the report added.
“Lenders are likely to be less affected in Q4, FY20 with the lockdown becoming widespread only in the last week of March this year,” Ravikant Bhat, Analyst at IndiaNivesh Securities, told the paper.
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First Published on Mar 25, 2020 10:28 am