RBI Announces Moratorium 2.0: No EMI till Aug 31
The Governor of Reserve Bank of India, Shaktikanta Das has announced moratorium 2.0 for Term Loans till 31 Aug, 2020. In face of ongoing financial disruptions and COVID 19 lockdown in the country, the previous Moratorium decision has been revised and it is decided to grant extension on all repayment relaxations for another three months said the governor in the press briefing on Thursday.
India’s COVID 19 Loan Moratorium package thus turns into a six month repayment deferment plan by the RBI. The Term Loans include loans and working capital credit lines such as Personal Loans, Home Loans, Business Credit Lines, Credit Card bills, Agriculture Loans etc.
The governor has also said that all the banks and lending institutions are allowed to restore the margins for working capital to the origin level by 31 March, 2021.
The Governor said: With three-month moratorium that we allowed on term loans & working capitals, we also allowed certain relaxations. In view of the extension of the lockdown and continuing disruption on account of COVID19 pandemic, these measures are being further extended by another 3 months from June 1 to Aug 31.
It should be noted here that banks can use their discretion in following the RBI’s suggestions on extending Loan Moratorium. Likewise, the borrowers may also choose to opt-in or opt-out of Moratorium as per their financial situation. The interest will continue to accrue during the EMI deferment period. Yet, in face of loss of income/ jobs due to COVID & lockdown, the deferment in bank EMIs & loan repayments brings about much needed financial relief for the borrowers.
Those who have not opted for loan moratorium 1.0 can also use the RBI’s Moratorium 2.0 benefit. It is expected that individual banks will announce new loan moratorium details soon. The customers need to share their consent for EMI deferment through 3 modes:
- Moratorium form on the bank’s website
- By replying to Bank’s SMS communication
- By replying to Bank’s Email communication
RBI’s COVID 19 Loan Moratorium: Frequently Asked Questions
✅ What is RBI’s Covid Moratorium 2.0 package?
On May 22, Reserve Bank of India has announced its consent for extension of loan moratorium till August 31, 2020. The previous Moratorium was implemented from March 31 to May 31. The decision was announced on the press conference following the meeting of Monetary Policy Committee.
✅ What types of loans are eligible for RBI Moratorium?
The RBI’s Moratorium guidelines say banks should include all Term Loans and Working Capital Credit Lines for EMI moratorium. Though, the final decision rests with the individual banks. All private and public sectors banks have unanimously adopted Moratorium 1.0 and it is expected that the banks will follow RBI’s new instructions with full heart. Following loans will be included for RBI Moratorium 2.0:
- Credit Card Bills/ Credit Card EMIs
- Retail Term Loans like Personal Loan, Home Loan etc
- Agri Based Loans
- Business credit lines
✅ Will I be automatically opted for Moratorium 2.0?
Like previously, you would be required to share your consent to either continue the moratorium or opt out of it. The bank will share communication through Email or SMS. Kindly reply to the official message by the bank, as directed. Do not share any OTP or click on any third party link for Moratorium related communication.
✅ Can I opt for new Moratorium, if I did not take EMI relief before?
Yes. You can opt for Moratorium 2.0 despite of not opting for Moratorium 1.0 before. The repayment relief is announced for giving liquidity relief to the borrowers and thus you can choose to pay or not pay as per your convenience.
✅ How do I know the process of opting for Moratorium?
All banks have released Moratorium FAQs and forms on their websites. Also you can check the Process and List of Banks Offering Moratorium.
✅ Can I partly pay out my EMIs during Moratorium?
Most banks like Bajaj Fisnerv, SBI, HDFC are allowing borrowers to pay according to their convenience.
✅ How would 6 month RBI Moratorium impact my EMI?
To check the impact of 6 month RBI Moratorium or 3 month RBI Moratorium, use MyMoneyManra EMI Moratorium Calculator.
✅ How would Moratorium 2.0 affect my CIBIL Score?
There will be no impact on your Credit Score or Credit Report if you opt for Moratorium during the period dating March 31 to August 31 as this repayment deferment package is purely offered to grant liquidity relief to the borrowers amid financial disruptions caused due to the spread of COVID 19 pandemic.
✅ How would Moratorium 2.0 affect my Home Loan EMI?
With implementation of Moratorium 2.0, you need not pay out EMI on your Home Loan till August 1. The interest on your Home Loan will however continue to accrue. After the expiry of Moratorium date the tenure of the loan will be extended for the same period for which you used the Home Loan EMI Moratorium. You can either repay the accrued interest in a lumpsum payment or get your EMIs adjusted across the new tenor base.
✅ How would Moratorium 2.0 affect my Personal Loan EMI?
Your Personal Loan EMIs will be re-calculated after the end of RBI’s Moratorium period. The tenure of the loan will also be added accordingly to the original loan tenor. Your credit score will not be hurt.
✅ How would Moratorium 2.0 affect my Credit Card outstanding?
In case of Credit Cards, customers are allowed to pay out as much balance as they can afford. The rate of interest will continue to accrue. The balance of the card will be reduced from the credit card’s overall limit. The customers are expected to repay whole of the card balance and accumulated interest in the next statement cycle generated after the moratorium.No late payment will be charged from card holders.
✅ How would Moratorium 2.0 affect my working capital creditline?
Banks are requested to not make any changes to working capital credit limits due to Moratorium. The deferment of EMIs will not affect your business rating and you can repay amount with accrued interest after the expiry of Moratorium deadline.