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Loan repayment/EMIs can be deferred by 3 months: 5 things to know

03-Apr-2020

To provide relief to the middle class amid the disruption caused by the coronavirus lockdown, the Reserve Bank of India today allowed banks and other financial institutions to permit moratorium on three months on payment of instalments of all term loans outstanding as on March 1, 2020. In addition, the RBI today announced big rate cuts - both in repo rate and cash reserve ratio. The central bank also announced many measures to boost liquidity, a move that will release will inject a total liquidity of 3.74 lakh crore to the system.

These moves were welcomed by Prime Minister Narendra Modi who tweeted: "Today RBI has taken giant steps to safeguard our economy from the impact of the Coronavirus. The announcements will improve liquidity, reduce cost of funds, help middle class and businesses.

Here are 5 things to know about RBI’s announcement:

Financial institutions can shift the the repayment schedule and all subsequent due dates, also the tenor for such loans, by three months.

The financial institution however has to take a board approval for putting in a policy of moratorium of three months on loan repayment.

The rescheduling of loan repayments will not qualify as a default for the purposes of reporting to credit information companies (CICs) by the lending institutions. For borrowers the rescheduling of loan repayments will not adversely impact their credit history.

Source : Live Mint

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