The Reserve Bank of India has clarified that all lending institutions are permitted to grant a moratorium of three months on payments of all installments on term loans, including credit cards.
The RBI on Friday (Mar 27) announced that all banks will be permitted to allow a three-month moratorium on payment of installments of all term loans outstanding on March 1, 2020. The loan payments must pertain to the period between between March 1, 2020, and May 30, 2020.
During the moratorium period, a 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 will be cover 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.
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.
Source : Swarajya