Ticking Time Bomb

Sanjiv Bajaj is not known to mince words. The 50-year-old Bajaj family scion, who runs India’s largest non-banking consumer finance company with 43 million customers, has been vocal in opposing the six-month moratorium on loan payments announced by the Reserve Bank of India (RBI) to help borrowers tide over the cash crunch due to the Covid-19 lockdown. “It can alter credit behaviour of customers,” warns the younger son of industrialist Rahul Bajaj.

This vice chairman of Bajaj Finance has a point. Consider the moral hazard created by massive farm loan waivers that has affected credit discipline of farmers. “A longer moratorium does bring a risk if things are bleak on the economic front,” says Chandan Sinha, a Director on board of State Bank of India, India’s largest bank. But Sinha, who has had a long stint with the RBI, says, “Things have to look up.”

This is what every banker must be