Covid 2.0: Can RBI afford to announce another loan moratorium if situation worsens?

With the economic situation deteriorating again in the wake of the second Covid-19 wave, unemployment could rise sharply. In such a scenario, can the RBI afford to announce another moratorium on loan repayments as a relief measure? Here's all you need to know:

With Covid-19 cases sharply rising in the country, there are chances that stricter curbs will be reintroduced in various states to contain the spread of infections. Current restrictions in states like Maharashtra and Delhi have already started affecting businesses, especially small traders and the hospitality sector. If stricter lockdowns are announced and last for a prolonged period, other sectors may soon feel the pinch. Many people could lose jobs or face salary cuts as a result. It could mark another period of financial difficulty for lakhs of households in the country. In such a scenario, citizens will again hope for relief measures like the loan moratorium, which was announced last year.