New Delhi: The Reserve Bank of India on Friday announced that banks are permitted to allow a three-month moratorium on payment of installments of all term loans outstanding on March 1, 2020.
The decision will be applicable to all regional, rural banks, co-operative banks, NBFCs including Housing Finance Companies, however the final decision on passing on the benefit to customers will rest with the banks.
United diagnosticss
The RBI said the moratorium will not result in asset classification downgrade and will have no adverse impact on the credit history of the borrowers.
All commercial banks including regional rural banks, cooperative banks,NBFCs (including housing finance companies)&lending institutions are being permitted to allow a moratorium of 3 months on payment of installments in respect of all term loans outstanding as on March 1: RBI Guv pic.twitter.com/L6xl2lpu1w
— ANI (@ANI) March 27, 2020
A moratorium period is a time during the loan term when the borrower is not required to make any repayment. Normally, the repayment begins after the loan is disbursed and the payments have to be made each month. However, the RBI has made a one-time exception in view of the financial distress arising out of the global pandemic coronavirus and the economic havoc wreaked by the lockdown imposed to control its spread.
The decision, announced by RBI Governor Shaktikanta Das after a Monetary Policy Committee meeting, will bring relief to the middle class who had been demanding a relaxation on EMI payments as a new month approaches.
