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EMI moratorium / loan restructuring 2021 explained


SC rejects plea seeking loan moratorium

The Supreme Court, on June 11, 2021, rejected a petition that requested India’s apex court to give directions to the centre to offer a loan moratorium, keeping in view the monetary stress caused by the second wave of the Coronavirus pandemic.

While stating that they were not ‘experts on matters of finance’, the SC bench headed by justice Ashok Bhushan said it was not for the courts to dictate government policies. While striking down the plea, the top court also observed that the centre had ‘so many things to do’, including vaccinating people and attending to migrant workers, to cope with the devastating impact of the health emergency and it could not interfere with the government’s decision to fix priorities for relief during the pandemic.

It was up to the government to assess the situation and pass an order about loan moratorium, said the SC, adding that the issues raised in the petition, filed by one Vishal Tiwari, were in the realm of policy decisions.

Recall here that the Reserve Bank of India (RBI), in April 2021, allowed banks and housing finance companies to restructure loans given to individuals and small businesses, in view of the financial strain caused by the fragmented lockdowns imposed by several states in India, to contain the second wave of COVID-19. Under the fresh guidelines issued by the banking regulator, financial institutions were allowed to restructure loan exposures up to Rs 25 crores, which were standard as on March 31, 2021.

“Resurgence of the COVID-19 pandemic in India and the associated containment measures adopted at local and regional levels, have created new uncertainties and impacted the nascent economic revival that was taking shape. In this environment, the most vulnerable category of borrowers are individual borrowers, small businesses and MSMSEs,” RBI governor Shaktikanta Das said, while announcing steps to deal with the impact of the second wave. Following the RBI’s announcement, several public and private banks started offering loan restructuring to their customers.

(With inputs from Sunita Mishra)

 


SC defers hearing on PIL demanding loan moratorium to June 11, 2021

May 25, 2021: It is for the centre to decide about policies that would help Indian citizens to deal with the financial distress caused by the second wave of the Coronavirus pandemic, the Supreme Court (SC) said, on May 24, 2021. The apex court made this observation, while hearing a plea filed by one Vishal Tiwari, in which the petitioner asked the SC to issue a directive to the government, to offer a loan moratorium and interest waiver to borrowers to deal with the ongoing distress situation caused by the second wave of COVID-19.

Tiwari sought a six-month moratorium on term loans and an interest waiver for six months. “At most, what we can do is that we can allow him (the petitioner) to give his representation to the central government,” the two-judge vacation bench of the apex court, headed by justice Ashok Bhushan and comprising of justice MR Shah, said, adding that it was a policy decision and it was for the government to take such calls.

While adjourning the hearing on May 24, because the petitioner was not able to connect virtually for the same, the top court has now posted the matter for hearing on June 11, 2021.

“With the real estate sector being more severely impacted in 2021 as compared to 2020, as the apex industry body, CREDAI, has already made separate representations to the RBI and the government of India on the matter,” said Harsh Vardhan Patodia, president, CREDAI.

Meanwhile, on micro-blogging site Twitter, Tiwari wrote that he would now approach the RBI and the centre to get relief for thousands of borrowers reeling under the impact of the Coronavirus pandemic.

(With inputs from Sunita Mishra)

 


RBI announces Resolution Framework 2.0 for loan restructuring

RBI governor Shaktikanta Das, on May 5, 2021, announced a second loan moratorium to address the financial pangs caused to borrowers by the second wave of COVID-19

May 17, 2021: With an aim to support borrowers who are currently reeling under the monetary impact of the second wave of the Coronavirus pandemic in India, Reserve Bank of India (RBI) governor Shaktikanta Das, in an unscheduled virtual speech on May 5, 2021, allowed banks in India to offer a second loan moratorium.

“Borrowers, i.e., individuals and small businesses and MSMEs having aggregate exposure of up to Rs 25 crores and who have not availed of restructuring under any of the earlier restructuring frameworks (including under the Resolution Framework 1.0 dated August 6, 2020) and who were classified as ‘standard’ as on March 31, 2021, shall be eligible to be considered under Resolution Framework 2.0,” Das said in his speech. However, whether the restructuring facility allowed by the RBI could include a moratorium, would be at the banks’ discretion.

The move by the RBI came over a month after a plea was filed in the Supreme Court, seeking a moratorium of six months on the repayment of bank dues owing to the second wave of COVID-19. In his the plea filed on March 30, 2021, one advocate Vishal Tiwari, while blaming the centre and the RBI for not doing enough to mitigate the exigencies caused by the Coronavirus crisis, pleaded the top court to direct banks not to take action against individual loan defaults nor declare loan accounts as non-performing, for six months.

 

RBI loan moratorium 2.0: Eligibility criteria

Borrowers, who did not avail of the facilities offered during the first loan moratorium, can avail of the benefits provided under the second one. Borrowers, who availed of the facilities offered during the first loan moratorium, can also avail of the benefits provided under the second one, for up to two years. Also, to be eligible for the second moratorium, the borrower’s account must not show any default on loan repayment till March 31, 2021. Typically, a loan account is declared as defaulting if the repayment is not made for 90 days or more.

 

What if you already availed of a moratorium?

Those borrowers who opted for the loan moratorium 2020, are also eligible to get the benefit under the second moratorium. However, the remaining tenure can only be extended up to two years.

“In respect of individual borrowers and small businesses that have availed of restructuring of their loans under the resolution framework 1.0, where the resolution plan permitted a moratorium of less than two years, lending institutions are being permitted to use this window to modify such plans, to the extent of increasing the period of moratorium and/or extending the residual tenor up to a total of two years. Other conditions will remain the same,” Das said.

See also: How to pay home loan EMIs in case of job loss due to the Coronavirus pandemic?

 

How to apply for loan restructuring 2.0?

Eligible borrowers can apply for the second moratorium till September 30, 2021. Provided you fulfill the eligibility criteria, your bank will take up to 90 days to offer the facility to you.

 

RBI loan / EMI moratorium 1.0

In 2020, the RBI announced a moratorium for home loan borrowers for three months, between March 1, 2020 and May 31, 2020. This was extended by another three months, to August 31, 2020, to offer support to banks and borrowers, as the first wave of the Coronavirus infection exacted huge financial costs, forcing millions into joblessness. The time for applying for the first moratorium ended in December 2020. Later, the RBI allowed the moratorium as part of a restructuring scheme, where the loan moratorium could be extended up to a total period of two years.

(With inputs from Sunita Mishra)

 


Will the RBI announce a home loan moratorium 2.0?

Amid the chaos caused by the second wave of the COVID-19 pandemic in India, there are expectations that the RBI will announce a home loan moratorium scheme 2.0

May 5, 2021: Amid a drastic rise in infections during the second wave of the Coronavirus pandemic in India, whose cascading effects are already becoming visible on economic growth, industry leaders expect the Reserve Bank of India (RBI) to announce a home loan moratorium scheme 2.0.

However, the banking regulator does not believe that such a move is necessary, so far, even though the localised lockdowns by several states in India to curb the mounting number of COVID-19 infections, have started to impact lives and livelihoods.

In 2020, the RBI announced a moratorium for home loan borrowers for three months between March 1, 2020 and May 31, 2020. It was subsequently extended by another three months, up to August 31, 2020, to offer support to banks and borrowers as the first wave of the COVID-19 pandemic exacted huge financial costs, forcing millions into joblessness. After August 2020, a one-time restructuring for loans was also allowed on select accounts.

To offer support to the economy in 2021, at a time when India is recording nearly four lakh new virus infections and over 3,000 deaths on a daily basis, RBI governor Shaktikant Das, on May 5, 2021, said the apex bank would ‘continue to monitor the emerging situation and deploy all instruments at its command’.

He, however, did not touch upon the subject of home loan moratorium for 2021, since the RBI is still in process of assessing the exact impact of the COVID-19 second wave, on the economy. In April 2021, when the RBI announced its first monetary policy review for the new fiscal year, Das said there was no need for a loan repayment moratorium, since businesses were better prepared to face the situation.

“We regularly monitor asset quality data. In any situation, a central bank should not give a knee-jerk reaction and we will not take it either. We will watch a situation, its depth, gravity and impact, before taking a decision,” he said.

Banks are of the view that that the time has arrived, for the RBI to take action. According to the Centre for Monitoring Indian Economy (CMIE), the second wave of COVID-19 and the fragmented lockdowns in India to control it, have impacted over 75 lakh jobs, taking the unemployment rate to a four-month high of 8%, in April 2021.

Even as the RBI continues to maintain that the economy would grow at 10.5% this fiscal, after a contraction of over 7% in FY 2021, rating agencies have also started to lower their growth projections for India for FY 2022. Recently, brokerage firm Barclays lowered India’s GDP growth estimate for FY 2022 to 10%, from an earlier 11%.

Brokerage firm Goldman Sachs has also lowered its estimate for India’s economic growth to 11.1% for FY 2022 from its previous forecast of 11.7%.

(With inputs from Sunita Mishra)

 


What is the RBI’s home loan moratorium scheme?

In the wake of the COVID-19 or the Novel Coronavirus outbreak and the financial jolt that it may have caused for many, the Reserve Bank of India (RBI), in an attempt to provide some relief to those struggling with liquidity, announced some relief, on March 27, 2020, in the form of a moratorium on term loans for three months, ending on May 31, 2020. On May 22, the RBI extended this moratorium further by another three months, up to August 31, 2020.

Given a series of defaults in repaying the loans, the Supreme Court and the centre have been looking to come up with a breather for all stakeholders. In 2020, the centre had taken a decision to allow waiver of interest on interest in eight specified categories, for loans up to Rs 2 crores. However, the SC bench did not find any rationale behind the move and on March 23, 2021, the apex court directed that there should be no charging of compound interest, interest on interest or penal interest on the installments that were due during the loan moratorium period from March to August 2020 on any borrower, irrespective of the loan amount. In case interest has already been collected, it should either refunded to the borrower or adjusted towards the next instalments.

However, complete interest waivers are not allowed, because banks have to pay interest to depositors and pensioners.

As of April 2021, in a circular to all lenders, the RBI has said that all lending institutions should put in place a board-approved policy to refund or adjust the interest on interest charged to the borrowers during the moratorium period. The method for calculation of such refunds would be provided by the IBA.

Did the RBI’s EMI moratorium work for Indians?

Banking industry leaders are of the opinion that the moratorium relief can now be called off, because the economy has shown signs of recovery. Many may also be in a position to repay their debts. In the annual report of the RBI that was released on August 25, 2020, it notes, “Regulatory dispensations that the pandemic has necessitated, in terms of the moratorium on loan instalments, deferment of interest payments and restructuring, may also have implications for the financial health of banks, unless they are closely monitored and judiciously used.”

Further, it reads, “Macro stress tests reported in the July 2020 Financial Stability Report, suggest that non-performing assets may surge by 1.5 times above their March 2020 levels under the baseline scenario and by 1.7 times in a very severely stressed scenario. The system-level CRAR can drop to 13.3% in March 2021 from its March 2020 level under the baseline scenario and to 11.8% under the very severe stress scenario.”

RBI deems it fit that a recapitalisation plan for public and private sector banks is very important at the moment. The RBI has gone ahead and advised NBFCs to carry out COVID-19 stress tests and take necessary remedial measures. Meanwhile, Japanese brokerage firm Nomura has said that no quarter would see positive growth in the ongoing fiscal.

 

The moratorium came as a  relief for many

It is important to note that for many borrowers, the moratorium spelt relief. A study by NBFC Finway suggested the following:

  • Pan-India, 45% of the borrowers availed of the moratorium.
  • Most of the borrowers were middle-aged, employed or in business.
  • Most of them were concentrated in the Delhi-NCR region.
  • Borrowers are now reluctant to take loans and are trying to minimise expenses.
  • Borrowers have been asking for lower interest rates.

A recent research showed that 45% of Indian borrowers availed of this temporary financial relief and given that the COVID-19 virus is still looming large, many borrowers remain in a difficult financial situation. Consequently, many have been asking for a further extension of the moratorium facility, till December 31, 2020.

 

Snapshot: EMI moratorium in India

EMI moratorium period March 1 to August 31, 2020
Eligible loans All EMI-based loans and credit cards
 EMI applicability Voluntary for borrowers
How to opt for moratorium Online or offline
Status Moratorium scheme has ended and banks have been instructed to figure out a loan restructuring scheme.

 

Timeline of decisions on loan moratorium by SC

On August 26, 2020, a SC bench led by justice Ashok Bhushan, directed the centre to clarify its stance on the matter of waiving interest. Lawyer Vishal Tiwari had moved the apex court in this regard, citing that the ailing industries needed more time to emerge from the financial stress and hence, the SC should consider extension of the moratorium period till December 31, 2020. This applies to the payment of monthly installments of all term loans outstanding as on March 1, 2020. This applies to home loans, as well.

On September 1, 2020, the apex court directed banks to avoid classifying loans as non-performing assets, if these were standard loans and were not overdue by over 30 days as on March 1, 2020. This may be a breather for hard-pressed borrowers over the next two months, until the SC takes a decision. Further, a loan restructuring facility may be extended to those borrowers who were severely hit by the pandemic. On the other hand, it may disturb the health of the banks, as estimates show that the bad loans of banks reached a whopping Rs 8.42 trillion as on June 30, 2020.

On September 10, 2020 the SC said that it will hear the matter and pronounce an interim order. In the absence of a concrete reply from the centre and the RBI, the top court  deferred its judgement. The apex court had also asked the centre, the RBI and banks, to file a definitive reply on their point of view, on waiving of interest charged during the moratorium period, keeping in view the KV Kamath Committee’s recommendations.

On October 5, 2020, the centre in its affidavit said that small borrowers, who took loans of up to Rs 2 crores, would get relief from the payment of compound interests during the six-month moratorium period but this would not apply to loans above Rs 2 crores.

However, the centre’s response was not sector-specific. For example, the industry body, Confederation of Real Estate Developers’ Associations of India (CREDAI) that represents about 12,000 promoters across the country, noted that there wasn’t any relief provided to them in the form of loan restructuring. 

On October 14, 2020, the RBI told the top court that the centre has agreed to waive compound interest charged on loans of up to Rs 2 crores for the six-month moratorium period. The SC directed the centre to go ahead with the plan but also come back with an ‘appropriate action plan’, on November 2.

Starting November, the following discussions came to the fore. 

Coronavirus and impact on credit score

Credit scores of many have been affected and this would be a pain point, not just for the person in question but the banks as well, since recovery has become tougher. Further interest waivers may be important at this stage.

Additional liquidity looks necessary

Kapil Sibal, on behalf of CREDAI Mumbai, has said that the moratorium should be extended to the end of the financial year 2021. Not just that, an emergency credit line plus additional liquidity needs to be pumped.

Banks are helpless

Advocate Harish Salve, on behalf of the Indian Banks Association, has said that the SC had passed orders restraining banks from classifying the accounts as NPAs. This has crippled banks, leaving them helpless to take action against defaulters. 

 In this scenario, it would be pertinent to understand the concept of a moratorium and its impact.

 

Blanket interest waiver on specific loan categories

On the basis of various hearings, the SC has directed the Modi government to waive interest on eight categories of loans paid upto Rs 2 crores, in view of the Coronavirus pandemic. The eight categories of loans include MSME (micro, small and medium enterprises), education, housing, consumer durables, credit cards, automobiles, personal and consumption.

“For several months, a large number of industries were not allowed to function and exemptions were granted only to few of the industries to run and carry on its activities, which were found essential and necessary in the situation,” the bench said. 

However, if a blanket waiver be indeed given, authorities explained that the amount would be Rs 6 lakh crores and this may hamper the economic growth.

Domestic rating agency ICRA recently said the monthly collections, in its rated retail loan pools originated largely by NBFCs and HFCs, have reached pre-moratorium levels, as of December 2020 but the same is not true for its rated microfinance players.

 

What is a moratorium?

A moratorium is the act of postponing or deferring an activity and should not be confused with a waiver. Here are some frequently asked questions to understand moratorium, its benefits and implications:

Impact on borrowers

  1. What does a 6-month moratorium on repayment mean, for home loan borrowers?

A six-month moratorium allows you to defer your EMI payments by a period of three months. This should not be mistaken for a total waiver. If your instalments were due between March 1, 2020 and August 31, 2020, the RBI has now permitted your bank to allow you to postpone the repayment. However, your bank is not obliged to do so. It may or may not allow it, or different banks may have their own criteria for establishing who should be allowed an EMI holiday for these six months. However, banks that were already allowing the initial three-month moratorium may continue to do so.

  1. Will I have to pay extra as interest, if I choose the moratorium?

Yes, you will be paying more as interest, if you choose to avail of the moratorium. Let us see how that works.

Suppose you had taken a home loan of Rs 70 lakhs at 9% interest for a period of 20 years from Allahabad Bank. The monthly installment in this case comes to Rs 64,400. In case you choose to take the moratorium for three months, the interest will continue to accrue which comes to Rs 1,58,684. This will be added to your overall liability.

Hence,

Principal: Rs 70,00,000

Interest Payable: Rs 82,99,365

Interest for moratorium period: Rs 1,58,684

Total amount payable: Rs 1,54,58,049

Total amount payable if moratorium not availed: Rs 1,51,15,396

While you will be paying a higher amount when you repay the EMIs, the moratorium on housing EMIs will help you rearrange your finances in the short-term. On the other hand, if you do not opt for the moratorium, you would end up saving Rs 3,42,653.

  1. Will moratorium be applicable on principal repayment, interest repayment or both?

The moratorium will be applicable to both principal and interest, that is wherever you are paying either EMIs or Pre EMIs. The interest, at the applicable interest rate, shall keep on accruing on the outstanding portion of the loan during the moratorium period.

4.Will opting for the moratorium affect my credit score?

No, the advantage of seeking this moratorium is that it will not show up as a default in your credit score. Further clarifications are awaited from financial institutions.

  1. Is there any penalty that will be charged

No, neither will there be any penalty charged nor will your credit score be compromised during this tenure.

  1. What if I have multiple loans running?

The moratorium facility will be extended to all your term loans. However, you must check with your respective banks, whether they would want you to opt-in or opt-out of this facility.

  1. What will be the effect of a 6-month moratorium on the self-employed?

In light of the example given above, you could say that the extra interest accrued is a small price to pay, given that some self-employed borrowers may find it tough to repay, with most businesses suffering losses due to the lockdown. In the six months, a self-employed businessman/woman can divert this EMI amount and use it elsewhere. Hence, there is no immediate worry of losing out on one’s liquidity. After a period of three months, the borrower can go back to paying his monthly dues with the knowledge that he/she will be now repaying a higher amount.

  1. What will be the impact of a 6-month moratorium on new borrowers?

It will have the same effect, as on any other section. You will be able to defer your payments by three months. However, you should know that since it is not an interest waiver, you are not getting any discount. If you have the financial appetite to keep repaying, you must do so. This will help you save some money. However, if you are suffering because COVID-19 has taken a toll on your finances, you should go ahead and avail of the moratorium, if your bank is offering the same.

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Guidelines by banks and financial lenders

  1. Is the moratorium meant for only nationalised banks, or all banks in general, including co-operative banks?

All lending institutions that is all commercial banks, including regional rural banks, small finance banks and local area banks, co-operative banks, all-India financial institutions, and NBFCs including housing finance companies, have been permitted to allow the moratorium.

  1. Is this a loan waiver (for three months) or a deferment?

Note that the RBI has only agreed for a deferment of the term loan. There is no waiver or discount or concession. Deferment also accrues charges.

  1. What if I have already paid my EMI for the month of March 2020?

Most borrowers give the Electronic Clearing Service (ECS) mandate for the first week of a month. Therefore, for many an EMI that was due in March, would already have been paid. For such borrowers, EMIs can be deferred by two months only – that is, for April and May, 2020 (in case of three-month moratorium).

  1. What if my EMI was due on March 28, 2020?

You may want to check with your respective bank about refunds. For example, ICICI Bank has said that it may consider refunding EMI for March if it was debited post March 27, 2020. ICICI Bank guidelines read as follows, “EMI paid prior to Mar 27, 2020 will not be refunded. However, if any EMI is debited after Mar 27, 2020 and the borrower customer opts for moratorium then such EMI may be considered for refund at the request of the borrower/ customer.”

  1. Is moratorium facility available for NRI borrowers?

Yes, the moratorium facility is applicable for NRI customers as well.

  1. Will the banks automatically apply the moratorium, or does the borrower have to approach the bank?

Individual banks will come up with their own criteria. Experts opine that since the RBI has used the word ‘permitted’ and not directed, most people may have to request their banks to grant them the moratorium. State Bank of India however has already allowed all borrowers to avail of the moratorium, irrespective of whether they need it or not. There is clarity awaited from other banks. RBI has asked banks to prepare policies approved by their board to provide relief to all eligible borrowers.

  1. Is the moratorium applicable to individuals, or corporates too?

As per the RBI, the moratorium is permitted for all but banks can come up with their own parameters of determining eligibility. This confirmation and set of guidelines is awaited from various banks and we will update this article accordingly.

  1. Does it apply to those who are getting full salary during the lockdown period?

The economic impact of the COVID-19 may apply to all – both, salaried, as well as the self-employed. For the salaried, the economic impact may be in the form of pay-cuts, delay in salary payments or even layoffs. Therefore, the RBI has taken this step in anticipation, to ease the financial stress of many. More details are awaited from the individual banks. Eligibility criteria will be announced soon.

  1. What can I do if my bank does not offer a moratorium?

As already stated, it is totally up to the banks to offer the moratorium to you. In RBI’s words, “Lending institutions shall frame board-approved policies for providing relief to all eligible borrowers, inter alia, including the objective criteria for considering reliefs and disclosed in public domain.” Note the word ‘objective’. It is not on a subjective basis but on objective grounds that your bank will establish a criteria to roll out this moratorium.

If the bank doesn’t offer this relief, you may run the risk of losing your property, if you do not pay your EMIs.

Commonly asked questions

  1. Is the home loan moratorium a new concept?

Moratorium is not a new concept. Most borrowers who buy an under-construction property ask for a moratorium period. Agreeable banks usually offer up to three years of moratorium. However, in such cases, banks generally insist that the borrower pay the interest during the moratorium period, also called pre-EMI interest. After a period of three years, the full EMI is paid by the borrower. In the case of a ready-to-move-in property, banks typically give a moratorium of three to six months.

  1. How will lending institutions benefit with this move?

Note that lending institutions are not waiving the EMI or the interest. They are simply allowing you to defer your payment for which interest is applicable and accruing. Lenders will profit from this interest. Take for example, SBI’s term loan book which is big. The bank’s chairman Rajnish Kumar has said that the moratorium move will bring in more. Talking to the media, he said, “Our term loan book is fairly large and I think Rs 2-2.5 trillion gets paid every year, so for three months it would be Rs 50,000-60,000 crores.”

  1. What are some of the other term loans?

Term loans are secured loans (at times unsecured) and the borrower must repay the loan with interest, within a definite and specified period of time. Some examples are agricultural term loans, retail loans, crop loans, vehicle loans, education loans, personal loans, etc.

 

Housing recommends

Please note that if you opt for the moratorium, interest will continue to accrue. Here’s an example to help you.

Dev Sharma availed of a housing loan on March 1, 2020 amounting to Rs 1 crore with loan tenure of 236 months. If Sharma wants to avail of a moratorium on the instalment of Rs 90,521.00 which is due on April 1, 2020, then, the interest for the month of March amounting to Rs 75,000 will be added to the principal amount and the revised opening principal amount on April 1, 2020 will become Rs 10,075,000. The interest will be computed on the revised principal. Similarly, the interest for the month of April which is payable on May 1, 2020 of Rs 75,562 will be added to the opening principal on May 01, 2020, which will be Rs 10,150,562. The interest will be computed on the revised principal. In this case, Sharma’s tenure will increase from 236 months to 249 months, considering the unchanged rate of interest and instalment amount during this period.

Hence, if you are not financially stressed at this point of time, go ahead and pay your EMIs. This will save you some money.

Important conditions, to avail of the loan restructuring

Both, corporate and retail borrowers, will not be pulled up for defaults for the time being. The option of loan structuring is being offered to those who have been genuinely hit. Note the following:

  • If you plan to avail of the restructuring facility, be ready with concrete proof, such as letter of termination or salary cuts from your office, or your accounts of losses incurred in business, etc.
  • The restructuring will be provided to only those, whose debts were not overdue by over a month as on March 1, 2020.
    If you did not avail of the moratorium, you may still be able to restructure your loan.
  • Restructuring does not affect your credit score, although it will be reported to the credit bureaus.

 

Bank rules for availing moratorium

Most banks have taken to Twitter to announce their guidelines about the moratorium period.

 

State Bank of India

Particular Course of action
Customer who do not want to defer recovery of instalments /EMI No action is required. They may continue to pay in the usual course.
Customer who wants to defer recovery of instalments/EMI NACH – Where collections of such instalment / EMI is effected through National Automated Clearing House (NACH), please submit an Application (Annexure-I) along with mandate for NACH Extension-(Annexure-II) to stop NACH for these instalments through an e-mail to the specified email ID (Annexure-III).

Standing Instructions (SI) – Please submit an Application (Annexure-I) through an email to the specified email ID (Annexure-III).

Customers who want refund of the instalment/EMI already paid Please submit an Application (Annexure-I) through an email to the specified mail ID (Annexure-III)

For details, visit https://www.sbi.co.in/stopemi

 

Punjab and Sind Bank

Moratorium on All Term Loans

Bank shall grant a moratorium of three months on payment of instalments (including principal, interest, bullet repayment, EMI) falling due between March 1, 2020 and May 31, 2020 in respect of all term loans. The repayment schedule for such loans as also the residual tenor, will be shifted across the board by three months after the moratorium period. Interest shall continue to accrue on the outstanding portion of the term loans during the moratorium period. Standing Instructions (SIM) will be deferred by the Bank upto May 31, 2020. However, if the borrower is willing to pay the installment, the same to be recovered.

For more details, visit: https://www.psbindia.com/document/Advisory.pdf

 

IDBI Bank

Particular Course of action
Customer who wants to defer recovery of instalments/EMI The scheme will be applicable to all standard term loans under Housing Loan, Loan against Property, Auto Loan, Education Loan & Personal Loan as on March 1, 2020. Wherever the March 2020 instalment has already been paid by the borrower, the relief would be applicable for the EMI payable in April 2020 and May 2020.
Customer who do not want to defer recovery of instalments /EMI Customer may opt out from EMI moratorium by writing email to moratorium@idbi.co.in latest by April 3, 2020.

The E-mail should mention the following details

Email Subject should be Loan Account number

In the mail body please mention the following details

Name of the borrower.

Loan account number.

Customer to mention in the email that “I wish to opt out from the instalment moratorium facility offered by the bank, hence kindly  deposit my EMI by way of ECS/SI”

For more details, visit: https://www.idbibank.in/faq-covid-installment.asp

 

HDFC Bank 

Particulars Course of action
Customer who wants to defer recovery of instalments/EMI All HDFC Bank customers who have availed of retail instalment loan or any other retail credit facilities prior to 1st March 2020 are eligible.

Customers having overdues prior to 1st March 2020 may also opt for the moratorium, and their requests shall be considered by the bank based on its merits.

Call on this number and follow the instructions – 022-50042333, 022-50042211

Customer who do not want to defer recovery of instalments /EMI If you do not want the EMI moratorium, no further action is required from your side.

For more details, visit: https://www.hdfcbank.com/personal/pay/payment-solutions/loan-repayment

 

ICICI Bank

Particulars Course of action
Customer who wants to defer recovery of instalments/EMI In respect of all other types of facilities, borrower(s)/customer(s) will need to specifically OPT-IN for availing of Moratorium and postponement of payments falling due for payment between the period beginning Mar 01 until May 31, 2020. You can go here to Opt-in.
Customers who do want to defer recovery of instalments/EMI Those who do not wish to avail of the Moratorium, borrower(s) / customer(s) may OPT-OUT from the Moratorium by clicking on the link shared with the borrower(s) / customer(s) by the Bank through (i) SMS or (ii) e-mail. You may also visit ICICI Bank’s website www.icicibank.com failing which it will be deemed that borrower/ customer has opted for Moratorium.

 

All the other banks have also allowed the moratorium which includes Canara Bank, Andhra Bank, UCO Bank, Indian Bank, Syndicate Bank, Indian Overseas Bank, Bank of Baroda, Central Bank of India, Oriental Bank of Commerce, Punjab National Bank, Bank of India, Allahabad Bank, Union Bank of India, Corporation Bank.

Note: Some banks want customers to opt-out of the moratorium option if they do not wish to avail of the moratorium. Some others do not want you to take any action, if you want to continue paying your EMIs. It is advisable that you check with your bank for details published online.

 

FAQs

Will availing moratorium mean I will have to pay more?

Yes, availing of the moratorium will mean that your EMI burden will increase.

Can I take a loan now and avail a moratorium?

No, you cannot. The moratorium permission is only for loans that existed as of March, 2020.

Who will benefit from the RBI’s three-month moratorium?

Anyone who is in financial difficulty right now, will find it beneficial. Even if the EMI burden will increase thereafter, it helps financially-stressed families to tide over the immediate economic impact of COVID-19.

 

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