What this action does is free up cash that will otherwise enter the banking system as loan repayments, to remain in the account of borrowers. Cash is a precious commodity now with economic activity grinding to a halt. People will need money to pay for necessities to get through these times and finding out that there isn’t enough left over is not what any household will want to deal with at this time.
THE government announced a six-month moratorium yesterday on repaying loans taken by individuals and SMEs. For corporate customers, banks will be encouraged to grant a request for a moratorium on repaying loans.
The rationale given in a letter to CEOs of banks was simple: It will enable corporations to preserve jobs and swiftly resume operations when conditions improve.
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