All Commercial Banks including regional, rural, small finance banks and local area banks, Co-operative banks, All India Financial Institutions and NBFC’s including housing finance companies and Micro Finance Institutions, all lending institutions are being permitted to allow 3-month Moratorium on payment of installments in respect of all term loans outstanding as on 1st March 2020.
The moratorium is for payment of EMI’s, not on interest: Under the EMI Moratorium Relief Package, the government has instructed banks to give borrowers a grace period of three months for payment of EMIs. If you have an ongoing loan, you need not pay the EMI for March, April and May. However, this does not mean that three months’ EMI has been waived. It is only a grace period, not a waiver of the loan. Also, the banks are likely to charge interest for three months on the unpaid amount. However, these decisions could vary across individual lenders. Some may choose to extend the loan tenure. Others may seek a lump sum payment in June or hike the EMI from June onwards.
- Who is eligible:
- All Bank customers who have availed of a retail installment loan or any other retail credit facilities prior to 1st March 2020 are eligible.
- Customers having overdue prior to 1st March 2020 may also opt for the moratorium, and their requests shall be considered by the bank based on its merits.
- All Agri Loans (Kisan Gold Card) and Microfinance customers under the Bank’s Sustainable Livelihood Initiative are also eligible.
- All Corporate as well as SME customers are also eligible.
- What will happen if the customer chooses the EMI Moratorium?
If you choose EMI moratorium:-Bank will not ask for any EMI Payment till May 31st 2020.-Interest will continue to accrue on the principal outstanding for the period of the moratorium at the contracted rate of the loan. -The loan tenure will get extended by the corresponding period for which the moratorium has been availed.
For example, if the EMI for the month of Mar’2020 has been paid and a moratorium for April & May’2020 has been availed, then the loan tenure will be extended by 2 months.
- What should I do, if I do not want the EMI moratorium?
If the customer does not want the EMI moratorium, no further action is required from his/her side. Financial Institutions will continue to bank your repayment instructions. We encourage customers with adequate funds to continue paying during this period to avoid the extra interest charges and tenor extension. However, if you skip your EMI payment during this period, it is understood that you require EMI moratorium till May 2020.
- Why did the bank debit the customers’ account when the RBI has announced a moratorium?
Opting for the Moratorium is entirely the customers’ choice. We understand that all the customers may not opt for the Moratorium given that there is an additional levy of interest payable under the terms of the Moratorium. If you wish to opt for the Moratorium, the banks would be happy to refund the EMI debited and register your Loan account under the moratorium process.
- What charges will the customer pay if he avails this EMI Moratorium?
If you avail of the EMI moratorium, there will be a levy of interest at the contracted rate of the loan for the period of EMI moratorium on the loan outstanding. Such interest will be collected by extending the original tenor of the loan accordingly.
- How does the customer get this EMI moratorium?
You will have to provide your consent to the bank through any of the following ways:-
Call on the concerned bank’s number and follow the instructions.
Note: Keep your loan account number handy before you start the process.
- The Customer has more than one loan from a Bank (Eg. Personal Loan & Car Loan). Can he get an EMI moratorium for both the loans?
Yes, you can opt for an EMI moratorium for each loan that you have availed from the respective banks. Please remember that additional interest for the EMI moratorium period will be applicable for each loan separately.
- What if the Customer already paid my EMIs and would like to avail the moratorium till 31st May 2020.
You can avail of the moratorium benefits for the unpaid EMIs.
- Does the moratorium affect my Credit Rating?
No. Opting for the EMI moratorium will not affect your Credit Rating or Score.
- Does this moratorium apply for Credit Card outstanding and Loans on Credit Cards?
Yes, the moratorium is available on Credit Card outstanding and Loans availed on Credit Cards for payments due from 01 Mar 2020 till 31 May 2020. The moratorium allows you to defer the payment till 31 May 2020. You are required to pay the minimum amount due or total outstanding and accrued interest charges on the due date after 31st May 2020.
- Are all credit card customers eligible for this moratorium?
Yes. All retail credit card customers will be deemed eligible for the moratorium if they are regular with their payments on or before 1st March, 2020 on their credit card outstanding and loans taken on the credit card.
- How do the Customer avail the credit card moratorium?
To avail the credit card moratorium,
(a) Voluntarily defer paying the outstanding during this period i.e. make NIL payment
(b) Turn off AutoPay (in case the same is currently availed) through net banking / mobile banking to avail the benefit of the moratorium and reactivate the same post the end of the moratorium period.
- Will interest be levied for the moratorium period on the customers’ credit card outstanding and loan on credit cards?
Yes, interest will be levied as per the contracted rate on the card. Opting for 3 months moratorium allows you to defer the payment of your credit card dues and loan installments took on credit card till 31st May 2020. We encourage customers to make full payments towards the outstanding wherever possible to avoid/minimize the levy of interest charges for this period. Kindly note that the moratorium is a deferment of payment and not a waiver of interest. You are required to pay the minimum amount due or total outstanding along with accrued interest charges on the due date after 31st May 2020.