Banks have started raising awareness among their affiliates about a three-month deferral for all term loans, including loans for homes, cars and crops, to help clients face financial difficulties due to the corona virus outbreak and subsequent nationwide overcome blockage. Several banks said on Tuesday that they have informed and provided their affiliates with the detailed guidelines on various schemes recently announced by the RBI and that customers are receiving notifications of the EMI payment individually on their registered mobile number. Union Bank of India Executive Director Rajkiran Rai G told PTI that affiliates have been informed of the moratorium on all term loans.
“In the case of those who have opted for ECS route for EMI deduction, customers will have the opportunity to take advantage of the facility by notifying the affiliate concerned via email or other digital medium,” he said. Banks in themselves cannot unilaterally stop ECS payment due to a legal issue, but the customer has the option to request the bank to stop it, Rai said. He went on to say that customers whose income has not been impacted are encouraged to continue paying according to the scheduled time.
“According to RBI’s COVID 19 regulatory package, Indian Bank allows a moratorium by deferring payment of EMI / term loans and interest / interest on working capital for 3 months, ie March 1, 2020,” said a tweet from the banks . Another public lender PNB said it presents a lighting scheme for its customers. “For the purposes of COVID-19, it has been decided to defer the payment of all installments on term loans and the recovery of interest on cash credit facilities maturing between 1 March 2020 and 31 May 2020.”
Canara Bank tweeted: “In terms of Covid 19 – RBI package, borrowers are eligible for deferred payment / deferred payment / EMI for term loans maturing from 01.03.2020 to 31.05.2020 and the repayment term is extended accordingly. SMS has also been sent to customers to make use of this. ”
As banks clarify their stance on the EMI moratorium, this will help clear doubts among customers who were confused after receiving payment reminders from lenders. Last Friday, the RBI announced that all term loans, including retail and crop loans and working capital payments, will fall under the three-month moratorium. Banks now have the freedom to set working capital limits, with RBI saying that no payment failure should be considered a default and reported to credit reporting companies.
“The repayment schedule for such loans, as well as the remaining term to maturity, will be shifted across the board three months after the moratorium has been received. Interest will continue to accrue on the outstanding portion of term loans during the moratorium period, ”said the RBI. Delayed terms under the moratorium will include principal and / or interest components, bullet repayments, EMIs, credit card fees, it said.
“Credit institutions shall establish a board-approved policy for granting the above exemptions to all eligible borrowers. When a lending institution’s exposure to a borrower is Rs 5 crore or higher, such as on March 1, 2020, the bank will develop an MIS for the exemptions granted to its borrowers, including information on borrowers and credit facilities. as to the nature and extent of the assistance provided, “he said.
After the announcement, banks had only one working day to finalize the details and issue instructions to branches, a senior official from another public sector bank said. As soon as the Reserve Bank received more detailed points on the implementation of the moratorium, approval was sought from the leadership of the Governing Council and necessary instructions were given to staff on its implementation.
Yesterday, the Ministry of Agriculture said farmers will continue to receive a short-term loan of up to Rs 3 lakh at a subsidized interest rate of 7 percent, and fast repayers will get it at 4 percent, as the government has provided the subsidy to banks up to 31 May. The decision, which is implemented through banks, is because many farmers are unable to get to the banks to pay their loan costs due to restrictions imposed due to the lockdown. In addition, the Indian Banks Association is expected to ask frequently asked questions about the various measures that the Reserve Bank has announced for the benefit of customers.