Tata Motors Finance, the captive financing arm of Tata Motors Groups, declares a pause on all EMIs for both corporate and retail customers, citing less repayment of loan due to moratorium.
They said that about three-fourth of its loan book is under moratorium as of June. The waiting period declared by RBI, which has now been extended to August, is to assist the consumers who have been affected economically due to Covid-19 pandemic.
Samrat Gupta, CEO, Tata Motors Finance, told Mint, the company recorded repayments worth Rs 600 crore in contrast to the normal average collection for a good month which is at about Rs 1500 crore.
There has been a significant reduction in overall economic activity and with no remedy expected in the foreseeable future, the businesses need to wait before they can become financially strong.
Tata Motors Finance said it spoke with over 3,000 of its consumers, across segments and vehicle applications and offered moratorium to those who opted for it. Factors such as minimal cash flow, less buying capacity and reduction in demand have emerged as the major areas of concern for the customers who failed to pay EMI’s.
Samrat Gupta, said that we have engaged with our customers to understand the immediate challenges and have looked to address the need for liquidity for immediate survival.
The company that said it has offered flexible EMI options for the businesses, especially Micro, Small and Medium Enterprises (MSMEs) – providing them with easy access to the working capital.
Although Tata Motors has about Rs 37,000 crore of assets under management, its annual book size is likely to decline this year on the extension of the moratorium.